As a business owner, the idea of dealing with a business dispute is one of the least pleasant things you can consider.
However, this possibility is something you must not only acknowledge, but also plan for. After all, a dispute could happen to anyone, and how you handle it can change the course of your business ties.
Alternatives to litigation
As FINRA points out, alternatives to litigation exist. This includes arbitration and mediation. Arbitration is similar to litigation. An arbitrator will even hand down a decision based on the evidence provided that all parties must follow.
Mediation, on the other hand, is a little more loosely formatted. Mediators simply guide parties along and allow them to make choices for a final outcome on their own.
Why should you avoid court?
But why avoid litigation in the first place? First of all, taking a case to court takes a lot of time and money. On top of that, because it is a public court case, anyone has access to the court records. Thus, alternative methods are great for maintaining privacy while also saving costs and time.
However, what is most important is preserving business ties. A business builds itself up on its connections, whether that is toward its customers or toward its partners. Without these ties, a business cannot generate profit and it will die.
Burning business ties is sometimes inevitable. However, it is best avoided where possible. One burned bridge can lead to many other losses, after all. Ultimately, it is best to limit these losses as much as possible.