If you do business with enough people or companies, there will likely come a time when a dispute arises. Unfortunately, it is human nature that people will not always agree.
That is why ensuring you have strong contracts in place with employees, vendors and more is crucial. Problems are less likely to occur when both parties are clear about their obligations.
Your first steps if a dispute arises
Your first step should be to refer back to relevant written documentation. This will likely include your contracts, as well as emails, meeting minutes, accounting data or even documented applicable policies. Having clear data to look back on can help de-escalate the situation and in some cases, even help to avoid a legal action.
A carefully worded and constructed contract is key not only avoid a dispute but also to clarify how to approach and resolve a dispute if a disagreement does arise down the line. Specifically outlining if the matter must first attempt arbitration, for example, can potentially help save your business both time and money.
Should you always stick to the contract?
Depending on the situation, you might initially attempt to talk things out and propose solutions that resolve the agreement and mutually benefit both parties. Why might you do this rather than sticking strictly to what your contract says? Because it might work out better in the long run.
When you encounter problems, you need to consider the bigger picture. You need to think about what you really want. In the event of a vendor dispute, do you want the other company to pay you compensation as per the contract terms if it means you will never again work together? Or would you prefer to cut them a little slack, perhaps even take a short-term financial hit, if it means you preserve a relationship that has long-term profitability?
Seeking legal guidance to understand your rights and obligations in a disputed business situation can provide you with a sound basis for making decisions. You can then pursue more aggressive legal options if necessary or seek an alternative if you feel it is best for your business long term.