5 Ways to Settle Small Business Disputes Without Going to Court

This is a guest post by Jenna Smith. Find out more about how to submit a guest post here.settlement, out of court, adr, alternative dispute resolution, mediation, arbitration

Perhaps more threatening than any competitor to your small business these days is an often feared and potentially company-killing dispute between business partners.

There are plenty of horrific stories about friends and family members suing one another over business disputes. It’s not pretty. That’s why it’s wise to consider ways of amicably handling such disputes before they arise – which at some point they likely will.

The following are 5 such ways to settle disputes out of court that should hopefully keep you out of a lawyer’s office.

1. Stop Yelling, Start Talking

I think we can all agree as reasonable, calm human beings currently not engaged in an argument that yelling gets us nowhere.

When tempers flare and voices rise, sensible communication almost always breaks down immediately.

Only when both parties agree to stop yelling and try to sit down and have a sincere, peaceful one-on-one conversation can real progress even begin to be made.

2. Get to the Root of the Problem

In order to resolve a quarrel between any two people, you must get to the root of the problem. Often times what seems like a surface issue goes much deeper than either party knows or is willing to admit.

Putting your feelings out there and really getting to the core of a problem is the best way, and often times the only way, of permanently settling a real dispute.

3. Re-evaluate Goals/Plans

Arguments can often force parties to reevaluate their business plans.

If one or both partners is concerned about various aspects of the business, sitting down and going back over your initial plans and goals and tailoring them together with both of your concerns in mind can help the parties to work better and avoid disputes in the future.

4. Use Existing Exit Strategies

When entering into a business partnership, especially with friends or relatives, it’s wise to consider exit strategies beforehand.

Having a written buy-sell agreement for your business can make the process that much less painful, and could potentially save your relationship if nothing else.

5. Use Alternative Dispute Resolution

Short of filing suit, there are a couple of alternatives for resolving a dispute, including using arbitration and/or mediation. Arbitration is a binding form of resolution where a third party (an arbitrator) determines a resolution to a dispute, and that determination is binding on the parties. Oftentimes contracts have binding arbitration clauses which require the parties to go to arbitration.

In California, there are plenty of great lawyers and retired judges who can serve as an arbitrator or a mediator for your dispute. You can contact your local bar association for recommendations.

Mediation can be similar to arbitration, except that the mediator does not have binding authority to settle a dispute, and so he or she must persuade the parties that it is in their best interests to agree upon a settlement.

Although we usually fail to consider it as such beforehand, entering into a partnership with a friend, acquaintance, family member, or anyone else for that matter, can be as trying, or more trying, than entering a marriage.

The biggest difference is, you haven’t pledged yourself to your business partner for life, and you’re both after a very tangible and unemotional goal: monetary gain.

Although settling disputes in these situations can be very mentally and emotionally taxing, hopefully these five tips will offer some stress relieving options for dealing with these problems in the best ways.

Jenna SmithJen Smith is a student and freelance writer. Her normal blogging topics include business, finance, and legal writing related to San Diego arbitration.

 

 

 

 

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Photo credit: Microsoft office online

 

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