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In a perfect world, all business relationships would work out exactly as planned but sadly we live in the real world and disagreements are never far away. Every year thousands of business disputes happen as customers, manufacturers, suppliers and even local authorities disagree over contracts, agreements and payments.
When a dispute occurs, you need to apply rationale and objective analysis to make the best decision for your business. This means compiling evidence and gaining advice on the likely strengths and weaknesses of your case, as well as the resources you wish to use to get a favourable result.
Judge Your Position - To start, you need to assess whether you have a strong case or whether you are likely to lose in the long run. To do this, you need to examine exactly what has happened as well as reviewing the relevant documents between the other party and yourself.
Do any legal agreements, contracts or written correspondence exist between you? When there isn't any documentation, it could be that the law suggests there is an implied contract in place from historical actions or transactions.
Decide the Best Result for You - As soon as you know the strength of your case, you can consider the result that you want to achieve.
You might want to set an example to prevent other customers or suppliers in the future putting you in the same situation. Even though taking the case all the way to court may prove to be expensive.
On the flip side, you might have had a good relationship with the other party which could lead to you wanting to find a more amicable solution so you can keep working with them.
You should assess the dispute with your 'commercial hat' on and decide what course is best for your ongoing business whilst minimising the loss of time, money, and associated risks.
Cost vs. Benefit – With all the above in mind, you need to weigh up your options and how much each course of action will cost in time and money.
Your case prospects will factor into this, as with a strong case going all the way to court may be the best option as things like court issue fee can be recovered when you win. While with weaker cases making a compromise offer for a quick settlement may be more efficient.
Create a Plan - Once you have combined your own research with legal advice, you can plan an approach to give yourself the best chance of seeing the desired outcome.
When it comes to disputes, a courtroom is often the last straw as there are many other solutions that are generally found before it gets to this point. Even if court proceedings are issued, settlements are usually achieved before the actual day in court is reached.
While you should always have your strategy and budget in mind, don't rule out altering this as the situation develops. Mediation and compromise should only ever be ruled out after you have considered them thoroughly.
Each dispute is unique and the optimum way to resolve them is via careful and early analysis of the situation and prospects. This is why there is no substitute to taking legal advice on your dispute as early as you can.