An unfortunate reality of running a business is that there are often times when conflicts arise. Part of being a business owner involves solving these conflicts, sometimes on your own and sometimes with the help of a trusted professional. Conflicts involving commercial disputes may seem simple to resolve on your own at first glance, but they almost always require a helping hand from an expert in the field.
If you’re tempted to go through a commercial dispute without the assistance of a legal professional or financial advisor, be aware that your business may be at risk for financial harm or even just reputational damage. Having the help of those who have experience resolving commercial issues, including contract violations or intellectual property infringement, can help your company get through this troubling time without irreversible harm.
Common Types of Commercial Disputes in Businesses
While no two commercial disputes are ever the same, there are a few common types that businesses are likely to face. Understanding what they are and what they may entail can help prepare you and your company for any potential issues in the future.
1. Breach of Contract
Almost every commercial transaction involves the use of contracts to ensure that both parties are on the same page regarding their rights and responsibilities. Unfortunately, a party involved in a contract may fail to meet the requirements or duties laid out in the contract. A breach of contract could be intentional or accidental, and it may be a minor issue or a major issue that is real cause for concern. And a business could be at either end of the dispute.
2. Intellectual Property Infringement
Intellectual property can cover a wide range of products, ideas or services that a business may offer, and in today’s technologically forward industries, it is extremely important. That’s why an intellectual property infringement dispute is not something that should be ignored. If you have research, trademarks, patents, trade secrets or even ideas that you want protected, ensure that your organization is legally protected and that you stand up to any infringements with the help of legal professionals.
3. Breach of Fiduciary Responsibility
Similar to contracts, fiduciary responsibility is the agreement between two parties in which one with a duty must act in a way that benefits the other, often financially. If a company is a principal or beneficiary to another party and that party does not uphold its fiduciary responsibility, it becomes a commercial dispute that must be resolved. This commonly occurs between two partners running an organization together or between an organization’s management and its shareholders.
The Most Common Ways To Resolve Commercial Disputes
Many commercial disputes end up in the courtroom for litigation. While this may be a common resolution, it is often expensive and can take a very long time from beginning to end, often years. Many financial experts suggest two other common ways to reach a resolution that may involve negotiations and closure without the expenses involved in litigation.
Mediation
When organizations want to avoid the legal world, they may choose to enter mediation as a way to resolve their commercial disputes. This involves a neutral third party that mediates between the two parties to come to an agreement. While mediation may be mandated by a court, it can also be a more conflict-free approach for two parties to talk through their disputes in a way that can be mutually beneficial in the end.
Arbitration
Like mediation, arbitration involves a neutral third party, but it is more legally binding. The third party, called an arbitrator, listens to both sides’ arguments, looks closely at any evidence presented and makes a final decision. Arbitration only works if both sides agree to the terms and the process before beginning. Like litigation, the final decision that results from arbitration is legally enforceable.
When Does Your Business Need Help?
Any time a commercial dispute comes up, your organization should turn to the professionals for help. Legal and financial assistance can spell the difference between successful resolution and years of protracted issues and potential financial loss. You don’t have to face this problem on your own; reach out to trusted experts for guidance through the process.