5 Common Types of Business Disputes That Can Be Easily Avoided

A company or a partnership firm can easily get into disputes as business disputes are an inevitable part of the business.

Some common causes of disputes can be:

  1. When there is a disagreement of any contract between suppliers, purchasers, contractors or any business partners.
  2. An unhappy customer.
  3. An unsatisfied employee or an employee who is suffering from improper working conditions.
  4. When statements or ideas of a few individuals don’t match and they debate about it.

So a manager has to take some rational decisions in order to handle these kinds of situations or else business could get in trouble as a fight could lead to people suing each other, distrust among them, blemishing the reputation of the business and many other situations which could harm business directly or indirectly.

Therefore, the following are the common business disputes which should be avoided:

Inter-Business Disputes

Businesses can have disputes with each other due to the rights related to the intrusion of intangible assets (patents, trademarks, etc.) or when a company is hiring an employee from a competing company. Professional Meditation or Legal Action could be required in such kinds of disagreements.

Partnership Disputes

It is the most common type of dispute. Mostly partnership disputes occur when the details in the partnership agreement are not clear, unclear authority share between partners and financial disputes. A Partnership agreement should have clear-cut details which could be done with the help of an attorney but first of all, the partners should talk about their dispute and try to solve it. In case the dispute between them worsens, they should hire a mediator.  

Contractual Disputes

Breach of contract can occur due to incorrect or incomplete execution of the contract. It could damage the reputation of the business or could cost a business heavily. Being on a safe side, a business contract should be followed sincerely.  By keeping a dispute resolution clause, using written contracts instead of oral contracts and keeping the right information so that the situation can be dodged.

Employment Disputes

Employment Disputes can occur due to employee discrimination, employment tribunals, and disagreements over salary or payment, maternity leave disputes, unfair dismissal charges and disputes over-representation. By encouraging open communication and resolution among the employees, guiding and resolving their issues, in case the dispute is among the employees then the story of each and every side should be heard then the problem has to be solved, employees should be taught about anti-discrimination laws; anti-discrimination programs should be organized and policies should be made for the same, it could be unintentional discrimination so the problem has to be analyzed.

Shareholder Disputes

These disputes generally arise due to reduction or denial while paying the dividends or due to the undocumented use of IPR (Intellectual Property Rights) when a shareholder leaves the company.

It is important to have a shareholder’s agreement which specifies the voting powers and dividend payments of the shareholders. It should also include information about how to resolve a dispute in case if any occurs.

Further, adding ADR (Alternative Dispute Resolution) clauses in business contracts could lead to effective results in solving matters like these. If still, the matter is out of hand, then it should be handled in the court.

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by Gaurav Bisht

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