Dealing with a contract dispute is not the end of the world, though it can certainly add unnecessary stress to your table.
How you handle the contract dispute can also dictate how easily things may go in the future, so it is important to pick a good method in the early stages.
Maintaining your business ties
FINRA takes a look at some alternative forms of resolving issues among contract parties, including arbitration and mediation. Generally speaking, it is better to go with one of these options rather than leaping immediately to litigation. Not only is litigation costly and time consuming, but it also puts your private disputes in the public eye due to public court records.
On top of that, it is important to try maintaining civil if not amiable relations with everyone you do business with. This is because the backbone of a business is the connections it makes with others around it. By severing ties, you weaken the foundation of your business.
Arbitration and mediation
Instead, arbitration acts as a similar path to litigation but without the extra expenses, struggles and publication of your dispute. An arbitrator will listen to all sides present their evidence and perspective. They will then make a decision which all parties must abide by.
Mediation does not offer the same rigid structure. A mediator cannot make a decision for all parties, either. They simply make suggestions and ensure that no one feels like they have not been heard. This is a better option for those who just need a little extra help and otherwise feel they could work out their issues on their own.
Either option serves as a good path to reconciling a dispute, in any case.
