No matter how carefully you try to serve your customers, business disputes are bound to happen occasionally. The world of business is dynamic and deals with different customers with different needs and personalities. Unfortunately, there are even customers who make it a sport to raise business disputes in order to get the upper hand and get a better deal. The point is that customers are all different and it is impossible to please everyone all the time. This is why you need to have a plan about how to approach and solve business disputes so as they don’t disrupt your operations or leave you with a bad reputation.
Make sure you do all you can to avoid business disputes.
The most commonly used tool for avoiding a dispute is to use well-written contracts. Contracts spell out exactly what the business is to perform and what the customer is to expect. Working without a contract is risky because each party assumes to know the expectations of the other. However, what sometimes happens is confusion over when the job is complete, how much the client must pay, and the level of support that must be provided afterward. This ambiguity is fertile ground for a dispute.
There are other things you can do to avoid business disputes in the first place.
One thing is to seek ways to disregard small things. A simple example of this is when a customer raises an issue over just a few dollars. While you shouldn’t always give in, sometimes having a dispute over a small amount just isn’t worth losing a customer who places many orders with you. Every situation is different but if you can avoid a big dispute over a small amount then it might be better for you in the long run.
If the dispute is significant, talking face-to-face should be your first option.
It should be something you try first because it is the least expensive way to come to a solution. This is also called negotiation and it involves getting all the information about how the other party sees the dispute. The desired outcome of negotiation should be a new written agreement that should end the dispute.
What does the law say?
Some disputes will not last long if there are local statutes that prescribe how an issue is handled. A customer might want you to fulfill something that you legally cannot do and this would probably bring about simple closure to the issue.
Mediation is a way to use a third person to help the negotiation process.
A neutral third person will facilitate the communication between the disputing parties and hopefully a solution will be reached. The mediator does not make any decisions and the process is not admissible in court should it go that far.
Arbitration is where the third party makes a binding decision.
Like mediation, a third person called an arbitrator listens to the facts surrounding a dispute between the two parties and renders a decision to arrive at solution. The arbitrator’s decision is legally binding.
The final way to resolve disputes is through litigation.
This is the most expensive and requires both sides to have a lawyer. Litigation results in a judge rendering the decision for a solution but oftentimes the dispute is resolved by an out-of-court settlement.
Today, many contracts are written with dispute resolution clauses.
These clauses sometimes state that if a dispute arises then it must be handled by the method prescribed in them. For example, many credit card companies have clauses that say disputes will be handled through binding arbitration. Having a clause like this in your contracts can sometimes save complications should things not go right in the future.