It’s no secret that working as an entrepreneur comes with a large number of benefits. Not only do you get to create your own schedule, but you also have a strong possibility of exponentially growing your personal income.
However, there are many different nuances associated with running a business that you need to be aware of. One of the most important to consider is common business disputes.
Let’s explore what you need to know about them.
Table of Contents
1. Partnership Dispute
It should come as no surprise that a partnership dispute is one of the most common conflicts that business owners deal with. Regardless of how efficiently operate your business, there’s always the chance that miscommunication could rise.
This is primarily due to the fact that business partners are often extremely busy and aren’t always able to stay on the same page as everyone else involved. For example, a business could have multiple partners who all have different philosophies regarding the overall business strategy.
If one of the partners makes a decision that affects the integrity of the company, they may be unable to reach an agreement. Another common conflict occurs when one partner leaves the partnership. The remaining partners often have difficulty deciding how to allocate certain assets.
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2. Business Property Dispute
Although not quite as common as a partnership dispute, disputes related to business property can prove to be substantial. These typically occur when another party has an issue with the commercial property that a business uses.
For example, that company may have illegally expanded its office onto someone else’s land. Or, renovations may have breached local zoning laws. Regardless of the reason behind the conflict, these issues are often costly and take a long period of time to resolve.
To avoid these in the future, it’s crucial to understand the laws and regulations related to the commercial property you use. When in doubt, double-check the standards in place before doing anything that could cause issues down the road.
3. Breach of Contract
Whether or not you deal with this issue is entirely contingent upon the contract terms.
To clarify, someone may file a breach of contract dispute if you fail to meet certain deadlines. The same can be said if your clients do not feel as though you upheld the quality that you promised.
The consequences for breach of contract will also depend on the terms of the contract. Fortunately, many scenarios involve arbitration before legal action takes place.
This is essentially a process that involves the two parties finding an agreement that works for both of them instead of taking the issue to court. Depending on the complexity of the dispute, arbitration may last weeks or months.
It’s important to note that if an agreement cannot be reached, the issue may result in litigation.
4. Workplace Dispute
Compared to the other types of conflicts, this one is relatively vague. To elaborate, a workplace dispute could be an issue between two employees, managers, and even customers.
More often than not, the cause behind these disputes is often superficial. This means that they may stem from cultural, political, or religious differences. Put simply, workplace disputes typically arise from a disparity in views.
However, it’s entirely possible for employees to file a dispute related to their pay. For example, an employee may have worked 20 hours’ worth of overtime during the previous month but was not paid for. Upon conversing with their manager, they were told that the company would not pay them at the overtime rate.
In this circumstance, it would be in the best interest of the affected party to take legal action. The employer’s behavior in this scenario violates a large number of employment regulations. Another common cause behind a workplace dispute is the occurrence of sexual harassment or assault at the workplace.
Similar to the aforementioned issues, workplace disputes often involve arbitration before litigation. This creates an opportunity to resolve the problem internally before taking legal action.
5. Disputes Related to Assets
In order to scale your business, it’s necessary to purchase assets under most circumstances.
This could be in the form of equipment, land, or even a commercial building. However, business assets are typically owned by an entire business entity and not a single individual.
This means that conflicts often result when deciding how profits are allocated. Disputes can also arise regarding the classification of assets, as there may be a disagreement in this regard. In general, large transactions require the approval of the company’s board members.
It’s not uncommon for numerous board members to disagree with certain details of the transaction. They may feel as though the asset is not a worthy investment, or they may also feel that there is no need to scale at this point in time.
The situation can become particularly complicated during the purchase of multiple assets at once.
Managing Business Disputes Might Seem Difficult
In some circumstances, it can even seem overwhelming. Fortunately, the above guide will help ensure that you fully understand the most common business disputes and are able to come up with a plan of action before they occur.
This will help you get you on track toward overcoming them. Looking for more tips that can help you out later on? Check out the rest of our blog for plenty of more useful information.
