How to Weigh Up Your Options in A Business Dispute
Monday, December 30, 2019, 6:00 AM | Leave Comment
Business disputes are very distressful because they sap up your energy and distract you from the core activities of the enterprise.
However, with proper planning and preparation, you can improve your business dispute resolution.
Here is a list of common business disputes and ways of mitigating or resolving them.
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Contract Disputes
Contractual disputes result from one of the parties to a contract breaching the terms or refusing to perform their part. For instance, you might contract an electrician to do wiring in your business premises, and they do a shoddy job or even refuse to turn up. You might lose a lot of time following up, especially if you have paid some money upfront. Most small business owners do not stipulate explicit terms in the contracts leaving a lot of judgment to the contractor’s discretion.
You should always state the quality of work you expect and write down all the details before signing and paying the contractor. Such provisions give you legal recourse when the contractor fails to perform to your expectations. Further, agree on milestones so that you only pay after you are satisfied with the quality of work.
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Repairs and Maintenance of Business Premises
Sometimes you may arrive at work only to find that the roof is leaking or the toilets need repair. Breakages and renovations are regular occurrences in most business premises. The sticking point is who is responsible for covering the costs. Most business owners make the mistake of signing lease contracts without stating who between the landlord and the tenant will pay for repairs. If your contract does not have such provisions, you could end bearing substantial costs or enduring prolonged disruptions. Always include clauses in the lease agreement stipulating who will cover the cost of repairs.
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Problems with Debtors
It is common for businesses to sell goods or services on credit. In other cases, small businesses win tenders at organizations that pay after a specific period or on a particular date. Entrepreneurs who engage in such arrangements will inevitably endure disputes with customers who do not honor their contractual obligation. Avoid such conflicts by having written contracts for all supply of good agreements. Further, only engage in business with organisations with a good credit score and a reputation for paying on time.
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Business Partner Disputes
It so happens that you may not have enough capital when starting your business and seek funds from friends or family in exchange for equity. While seeking partners is an excellent way of mobilizing funds, problems arise when you disagree on the direction the business should take or how to share responsibility. It is easy for the disagreement to degenerate into a legal dispute because none of the partners wants to lose their money.
Avoid business partner disputes by writing:
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A formal partnership agreement with all the co-owners
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The duties of each partner
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A dispute resolution mechanism
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The equity share of each partner
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How to share profits
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A guideline on how to dissolve the partnership
Whenever an issue crops up, you can always consult the agreement and apply the relevant clauses. You can also engage an external consultant such as a partnership dispute lawyer or a mediator to ensure that all issues are handled professionally.
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Final Words
Disputes are an inevitable part of running a small business. However, with proper planning and mitigation, you can avoid being on the losing end of a protracted conflict. Regardless of the situation, always stay calm and professional. Avoid venting your frustrations on social media because that will only amplify the problem. Instead, collect all the relevant records and seek constructive ways of business dispute resolution.
Throw us a like at Facebook.com/doable.financeAbout the Author
Patrick Watt is a content writer, writing in several areas, primarily in business growth, value creation, M&A, and finance. Other interests also include content marketing and self-development. Say hi to Patrick on Twitter @patrickwattpat
