Contracts help to minimize the conflicts your business has with vendors, customers, clients or employees. When everyone knows what to expect as well as the consequences of non-performance, all parties will typically make good on their obligations to each other.
However, no matter how carefully you draft your business contracts, disputes may eventually arise. If you can’t settle contract matters that may impact your business, you could very well end up in civil court.
Contract litigation can be unpredictable and expensive
Having a civil judge rule on a contract dispute will cost your company a lot of money. Just the discovery process alone may require a massive investment, as it may demand that your attorney review hundreds of pages of business and financial documents. Then, they need to present that information to the courts in a convincing manner.
Some companies find that alternative dispute resolution systems are the best way to address contract issues.
There are benefits to staying out of court
If you try to mediate or arbitrate a contract dispute, there are numerous benefits for your company. The potential financial savings are worth mentioning, as is the privacy that alternative dispute resolution offers you.
Typically, you can expect arbitration and mediation to remain confidential. Both parties can openly discuss the issues with the contract without fear that the details of their company’s inner workings will become part of the public record. Finally, working together can help you potentially preserve your business relationship, while litigation might do permanent damage to it.
Exploring alternative, neutral options for resolving your contract dispute could help you keep the matter out of court and keep your business’s losses to a minimum.