Small Business Disputes

Mediation is an excellent tool for small business disputes. Often it is quite overwhelming for a small business to come up with the time, money, and expertise to cope with disputes through litigation. Moreover, lasting hostility between a small business and vendor or client, business partner or employee can seriously affect the climate of the business as well as its reputation in the community. Mediation is an efficient and effective way of settling conflict quietly, without excessive money and simultaneously building community among small business people and their customers and neighbors.

Mediation offers a positive way to resolve conflict. Because you and the other party/parties make the agreement together, you are both more likely to keep it. Most mediations do result in a settlement, and that means leaving with a signed agreement or, at the very least, a signed memorandum setting out what you and the other party have agreed to. You have the choice of making the agreement enforceable in court or not. Remember, if you don’t reach a resolution in mediation, you haven’t lost anything. If nothing else, you’ve probably learned a lot about how the other person sees the problem which is an important part of determining your own future course of action.

When forming a business partnership, put a mandatory early mediation clause in the contract. Regarding your employees, include a provision in your policy handbook regarding mediation of any interpersonal conflicts or employer/employee conflicts. From contracts with your vendors to contracts with clients, employees, and other relationships include mandatory mediation provisions. Not only will you be saving yourself time and money, but you will be creating a positive resolution focused identity and climate around your business.

Finally, many residential and commercial real estate purchases have an early mediation contract clause which prevents a party from being entitled to reasonable attorneys fees as the prevailing party unless that party agrees to an early mediation prior to the commencement of litigation or arbitration.