Every business experiences its fair share of bumps in the road. Whether it’s a disagreement with a supplier, a customer refusing to pay, or a clash with a business partner, conflicts can quickly escalate into bigger problems if not handled properly. The key isn’t to avoid disputes altogether—that’s simply unrealistic—but to manage them in a smart, proactive way.
At Lawyerlink, we believe that having a clear approach to resolving disputes is key to keeping your business running smoothly and protecting your reputation. This guide will walk you through the steps of identifying potential conflicts, preventing them from escalating, and choosing the best path for resolution, whether through negotiation, mediation, or legal action. With the right strategies in place, you can stay in control and protect your business from unnecessary risks.
The best way to deal with disputes is to stop them before they happen. While it’s impossible to avoid every conflict, there are steps you can take to reduce the risk and safeguard your business. Whether the issue is about a contract, a commercial lease, an unpaid debt, employment, intellectual property, or a business relationship, being proactive is your best defence.
A well-drafted contract is your first line of protection against disputes. Clear agreements lay the foundation for resolving conflicts before they escalate. Make sure your contracts cover the following:
Set clear expectations on when payments are due, how they’ll be made, and what happens if payments are late.
Specify exactly what services or products will be provided to avoid misunderstandings.
Include specific timelines and consequences for delays.
Ensure both parties understand how and when the contract can end.
Define who owns any IP produced and how confidential information should be handled.
Detail the steps to be taken in the event of a disagreement, whether that’s mediation, arbitration, or litigation.
Tip: Keep your contracts straightforward and easy to understand. Using plain language reduces the chances of misinterpretation and ensures that everyone is clear on their responsibilities.
Good communication can prevent small issues from turning into major disputes. Often, conflict stems from misunderstandings or assumptions, which could be avoided with open dialogue. Here's how to keep things on track:
Make sure everyone involved knows their roles, responsibilities, and deadlines.
After important meetings or calls, send a follow-up email summarising what was agreed upon.
Regular communication with clients, suppliers, and partners helps maintain relationships and catch issues early.
Tip: If conflict does arise, approach the situation calmly and work collaboratively to find a solution. Open, constructive conversations can often prevent problems from escalating.
Good record-keeping is vital when disputes arise. Being organised and having all the necessary documents readily available can make a huge difference in resolving a conflict.
Save all signed contracts, delivery schedules, invoices, and terms and conditions. These documents show the responsibilities both parties agreed to.
Whether it's emails, meeting notes, or letters, keep everything. If conversations happen in person, make a note of it, including the time, date, and key points discussed.
For payment issues or financial disputes, keep copies of invoices, receipts, bank statements, and any evidence of losses.
If a partner, supplier, or employee isn’t meeting expectations, keep track of deadlines, deliverables, and any quality issues.
If a dispute involves employees, obtain their written statements or reports to document the incident.
Tip: Use software to store documents and track payments in one place. Regularly back up your files, both digital and physical, to avoid data loss.
Disputes rarely come out of nowhere—they tend to build up over time, with warning signs appearing along the way. Recognising these signs and taking action early can make a huge difference in how the situation unfolds.
The first step in resolving a dispute is identifying when something isn’t right. By recognising early signs of conflict, you can step in and address the issue before it grows into a bigger problem.
If someone starts avoiding emails or calls, or their tone changes, it could indicate dissatisfaction.
Unexplained delays in payments or missed deadlines can signal deeper issues.
If a stakeholder questions previously agreed terms or becomes more combative in discussions, investigate the cause.
If employees express dissatisfaction, file formal grievances, or become disengaged, it’s important to address the issue before it affects morale.
Knowing where you stand legally is crucial before engaging in any negotiation or dispute resolution process. Understanding your rights, obligations, and the strengths and weaknesses of your position allows you to make more informed decisions.
Does your contract contain a dispute resolution clause? Are there specific conditions that dictate how disagreements should be handled?
Research the relevant laws or industry regulations that may affect your dispute. Consulting a legal professional early on can help you interpret these rules.
Based on the facts and evidence you’ve gathered, how strong is your position? Are there any weaknesses the other side could exploit?
Tip: Before any conversation with the other party, ensure you fully understand the key issues in dispute and what a realistic outcome would look like.
When informal efforts don’t resolve a dispute, it might be time to consider more formal methods. If the other party is ignoring your attempts to find a solution, or the dispute is significantly affecting your finances or daily operations, taking legal action may be necessary.
Choosing the right approach depends on the complexity of the issue, the value involved, and your relationship with the other party. Formal resolution options include mediation, arbitration, and litigation, each with its own advantages and challenges. Consulting with a legal expert can help you decide on the best path for your business.