From Contracts to Courtrooms: Exploring Business Disputes and Resolutions
Owning and operating a business is complicated. Issues can arise for many different reasons. You may find yourself locked in a dispute with a competitor, a vendor, a supplier, an employee, or even a client/customer. Whether you are working towards a contractual agreement or you are actively trying to resolve an ongoing dispute, a proactive approach is crucial. Our Los Angeles business lawyer provides an overview of commercial disputes—from contracts to the courtroom.
Business Disputes Can Arise for a Wide Range of Different Reasons
A business or entrepreneur may end up locked in a dispute for many reasons. Conflict stems from everything from disagreement over the terms of a contract to internal disputes over the day-to-day operations of a company. Most often, conflicts arise when parties have different interpretations of their rights and their responsibilities. In some cases, disputes are fundamentally misunderstandings between two parties who are both acting in good faith. In other cases, a business may end up locked in a conflict with a dishonest counterparty. Some of the most common business disputes include:
- Breach of contract;
- Fraud allegations;
- Business torts;
- Employment law matters;
- Commercial collections;
- Partnership disputes;
- Shareholder disputes; and
- Intellectual property (IP).
Understanding the Process for Resolving Business Disputes in California
How do you resolve a dispute over a business matter in California? Can you look at the contract and work out a revision that meets the needs of all parties? Do you need to prepare for litigation and head to the courtroom? As a general matter, there are generally three different levels of conflict to use in commercial disputes in California. It is best to start at the lowest level and escalate the matter if necessary. Here are the three broad approaches for resolving business conflict:
- Negotiation: Negotiation is a direct—and often informal—approach to resolving business conflicts in California. Parties may negotiate on their own for small matters. For more significant issues, they should be represented by a California business lawyer. Negotiation is a method that involves the parties themselves engaging in discussions to reach a mutually acceptable solution without the involvement of third parties. It is highly flexible and allows for customized solutions that cater specifically to the needs and interests of all involved. Negotiation can be particularly effective in preserving business relationships, as it encourages cooperation and communication.
- Alternative Dispute Resolution (ADR): Alternative dispute resolution (ADR) methods or more formal and structured than straightforward negotiation. One of the best is mediation. As defined by the California Rules of Court, mediation is a “process in which a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement.” Another option is arbitration. It is a process that involves an arbitrator whose decision is typically binding and based on the merits of the case presented by each party. ADR methods are less formal than court proceedings. Key benefits are that they are quicker and almost always cost less than litigation.
- Litigation: Litigation is the process where business disputes are resolved in court, involving a judge and sometimes a jury to make a decision on the conflict. This approach is used in California when negotiations and ADR fail or when a binding legal decision is needed to conclude a dispute definitively. Litigation can be lengthy and costly, often involving extensive discovery processes, witness testimonies, and multiple hearings. Despite its complexities, litigation provides a structured legal framework to address disputes that involve significant legal questions or substantial amounts of money. Further, the reality is that some businesses need to take a case to litigation to effectively protect their rights and interests.
There is no one right approach to resolving a business dispute. In some cases, negotiation—even relatively informal negotiation—is the best option. In other cases, the dispute will be on the fast track to litigation. While there are benefits to trying to resolve any commercial disagreement at the lowest possible level of conflict (save time, money, etc.), companies always need to be prepared to protect their rights and interests. A California business law attorney can help.
Contact Our Los Angeles Business Dispute Attorney for a Confidential Consultation
At the Law Offices of Andrew Ritholz, our Los Angeles business dispute attorney is a skilled, experienced advocate for clients. We help businesses resolve problems. Contact our law firm today to arrange your completely confidential initial consultation. With offices in Pasadena and Monrovia, we provide commercial representation in Los Angeles and throughout all of Southern California.
