Disputes are quite common in business. Disagreements can occur between partners, between an employer and employee, between the company and a vendor or between the company and a customer.
When disputes do occur, there are various ways to resolve them. There are also ways to prevent disputes from happening in the first place.
Common dispute resolution methods
The Harvard Law School Program on Negotiation discusses the three resolution methods most businesses choose from:
- Litigation: This is the most well known, and it involves a courtroom battle. After each side produces evidence and witness statements, a judge or jury makes a decision. This is the most expensive and time-consuming method.
- Mediation: This method is the least expensive and least stressful. It involves a mediator who works with each side to help them come up with a fair solution.
- Arbitration: This method falls in between the other two. It involves an arbitrator, who acts as the judge. It is less formal and less expensive than litigation, but the arbitrator’s decision is generally binding.
How to prevent many disputes
Not all disputes are preventable, but there are steps that businesses can take to minimize them. Having each side read and sign a contract can clarify the relationship and minimize issues. However, Entrepreneur discusses that notarizing these contracts can further validate the agreement and prevent one side from stating he or she did not actually sign it. When this occurs, not only do you have the original dispute to handle, but you also have to spend more money and time in court fighting the denial. Even though notarizing is an extra step, many experts recommend making it.