When you enter a business relationship with a partner, vendor or client you have a contract that outlines the goals and responsibilities of the relationship. One part of the contract includes how to resolve disputes.
In the past, many contracts only offered litigation as a resolution. With this, you would have to have the court settle the issue. Today, though, there are alternatives that will help you avoid litigation, which can help save your business time and money.
Mediation is one alternative to litigation. With this, you meet with the other party and a mediator. Any agreement reached during mediation is legally binding. This means if someone doesn’t meet their part of the agreement, you have the means to take them to court to have it enforced or have other legal action taken against them.
Another alternative to litigation is arbitration. This is a formal process that results in a binding outcome. With arbitration, you meet with an arbitrator who hears arguments from both sides. Once the initial phase of presenting your argument is complete, the arbitrator will issue their decision.
Adding mediation and arbitration to your business contracts
To avoid the potential of litigation for business disputes, consider adding these alternative forms of dispute resolution to your business contracts. In the long run, it can help you save time and money, and may even help to preserve the business relationship you have formed.
Protecting your business
Having contracts in your business is a smart way to protect yourself and your interests. As a business owner, knowing your legal options is always recommended. This will help you make the right decisions for your business, regardless of its size or your industry.