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3 tips to avoid a business dispute

On Behalf of | Feb 2, 2022 | Business Litigation |

Disputes are part of doing business, but proactive measures can help reduce the risk of these disagreements growing into matters that require litigation. The following steps can help.

Step 1: Clear business formation documents

Ideally, the business creation documents will provide a clear outline and answer questions about equity division and job expectations. Use this as the foundation for business policies and procedures and make sure to communicate these expectations with partners, shareholders, employees, and vendors.

Step 2: Proactive approach can reduce the risk of litigation

Additional measures that can help reduce the risk of a dispute include:

  • Put it in writing. Avoid verbal agreements. Instead, use contracts to help outline relationships. These legal documents should provide a clear description of any business relationship and are beneficial for many arrangements including employment agreements and relationships with third-party vendors.
  • Protect IP. The company should take steps to protect its intellectual property (IP). Apply for necessary patent, copyright and trademark protections as needed to better ensure you can challenge any competitors’ attempt to use your IP.
  • Prepare for problems. Have review procedures in place to help reduce the risk of any issues and to address any if they develop. This can include a reporting procedure as well as a clear follow-up process.

Even with these proactive measures, problems can arise.

Step 3: Dealing with the problem when it arises

In some cases, it may be possible to negotiate a resolution to the conflict, in others the issue can escalate. It is often wise to delegate these issues with a legal professional to better ensure your business interests are protected. An attorney can discuss various resolution options, from litigation to arbitration or mediation.


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