Different ways to settle a business dispute

Business entails continual transactions with others, whether customers, shareholders or other companies. Most often these transactions are pleasant or beneficial. However, in some cases, conflict can arise, such as over a contract. What are you supposed to do when a dispute happens?

You can reach resolution in a variety of ways. Which one is best to use depends on your specific circumstances.


Your first option is to simply negotiate with the other party with the help of your legal team. You do not have to involve a court or other third party if you both are willing to try to sort things out on your own. This may be the quickest method.


Sometimes negotiation needs the boost of another professional: a mediator. Having an outside perspective can help both parties understand each other better, find common ground and think of new solutions.

This approach still puts you two in control of the outcome. The mediator only acts as a facilitator and has no legal power to force either of you into an agreement or to choose the resolution for you. Mediation also is inexpensive and fast compared to fighting it out in a courtroom.


Between mediation and litigation is arbitration. This refers to meeting before an arbitrator who acts like a judge. You each present your arguments and evidence, and the arbitrator makes a legally binding decision on the matter that you cannot appeal. You may choose whether attorneys will be involved. This process maintains privacy and is still less costly and combative than litigation.


The final and most expensive route is litigation, or a typical trial before a judge or judge and jury. The process is public but may never actually go to trial if you can settle beforehand. Litigation is best when there is lots of contention, little cooperation and no desire to preserve the business relationship. 

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