Types of Business Disputes and How to Solve Them

A business dispute is an argument between two or more individuals engaged in a business. For example, this could be a relationship issue, a contractual dispute, disagreements over the terms of an agreement, or other problems that may arise.

This article will discuss some types of business disputes and guide to resolve them.

Types of Business Disputes

Claims Disputes: This type of business dispute occurs when one party believes that another party has violated their rights under the law. The type of claim, and the remedy that is sought, will determine which court has the authority to decide a case. For example, a civil court may have jurisdiction over the case when a party sues another for money damages. 

Some claims, however, do not require actual money damages or involve allegations that would be criminally prosecuted if proved true – in these cases, jurisdiction is determined by the parties’ residency. Claims involving fraud, personal injury, copyright infringement, trademark violations, etc., may be brought in either the civil court or administrative agency (federal or state).

Breach of Contract Disputes

When one group fails to carry out its obligations under a contract, the other party has breached the contract. The aggrieved party may sue for damages or specific performance of the contract, depending upon what is written in the agreement.

If a party commits a non-monetary breach of contract, he cannot seek monetary damages. For example, one party agrees to repaint another’s fence and fails to do so. The party with the painted fence cannot then sue for the cost of painting the fence. However, if a contract is breached, then monetary damages can be recovered.

Disputes that Arise from Business Operations

Disputes may also arise between co-owners and business partners on carrying out their respective interests. Additionally, disputes between shareholders of corporations and directors of businesses may also occur.

The business community has developed procedures to resolve disputes that arise from the ordinary course of business operations. These processes, however, are ineffective at resolving claim disputes because they tend to be geared toward non-monetary breaches.

Employment Disputes

When an employer terminates an employee, the terminated employee often believes that the employer wrongfully terminated them. It could stem from defamation of character on the employer’s part, violation of public policy, or breach of contract.

Employment disputes are typically divided into wrongful termination and discrimination claims. Wrongful termination cases involve taking adverse employment action against an employee in relation to the type of work or hours, location of work, and so forth. In a discrimination suit, a worker sues because he believes that his employer has taken an adverse employment action because of the worker’s age, race, disability status, etc.

Employment disputes can also arise if a former employer fails to comply with the terms of employment agreements in which it promised not to compete, disclose confidential information or recruit employees.

Different Methods to Solve Business Disputes

There are several alternatives to resolve business disputes:

Arbitration

Arbitration is a method of resolving disputes requiring the parties to present their evidence and arguments to an arbitrator, who then decide. Unlike litigation, arbitration hearings are generally less time consuming and cost less. There is also less formality in an arbitration hearing.

Mediation

Mediation is more informal than litigation and is a good option when the chances of success are low, or money damages will not adequately compensate one party. In mediation, parties work with an unbiased third party who facilitates discussion and assists disputing parties to agree. The court or a non-profit organization may provide a neutral third party.

Litigation

Litigation is a more formal process than arbitration and mediation and involves attorneys presenting evidence to a judge or jury. A successful trial means that one party prevails over the other.

There are many available options to resolve business disputes outside of litigation, but litigation is typically the next step if the other ways cannot fix them. And when it comes to litigation, commercial litigation solicitors are the professionals you need on your side.

Conclusion

Business disputes can arise for a variety of reasons. To prevent conflicts, parties should carefully review their contracts and be sure that they understand what is written in them. However, if a dispute does arise, there are several ways to resolve it. It is crucial to choose the best resolution method for each specific situation.