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Tips For Managing Commercial Disputes


Tips For Managing Commercial DisputesWhen business relationships turn sour, if not resolved efficiently, the parties involved may waste precious time, funds and goodwill in resolving the resultant dispute. While it is inevitable that commercial relationships will not always run smoothly, it should be possible in most cases to avoid a long winded battle.

Choose Who You Do Business With 

Before entering into business with a person or entity, you should have an overview of who they are. The level of detail you will require will, of course, vary in different situations. A lower level of due diligence is required when one places a small order online compared with the background information a commercial landlord will require from a prospective high value commercial tenant. In either case, the parties should be comfortable with each other.

Put A Formal Agreement In Place 

There should be a written form of agreement in place setting out the basis of the arrangement. As above, the form of agreement and the level of detail included will depend on the type of relationship at hand. In some cases, a simple email confirmation of an order will suffice whereas in other cases one or both parties might have standard terms of conditions or contracts which govern their business relationships. In more complex cases, a detailed contract will be negotiated by lawyers and executed in advance of any transaction.

When drafting a contract, the parties should think carefully about what their priorities and concerns are. In many cases, one may be able to predict the potential points of conflict and these points can be dealt with in the contract. The contract can provide for resolutions and outcomes which both parties have agreed to in advance of any conflict. Having this agreement in place will aid a smoother resolution of any issues that may arise. 

Notify In Writing Once There Are Any Issues

If an issue arises, you should firstly check whether your written agreement provides what you should do. In some cases, a company’s terms and conditions will set out who you should contact and how you should contact them in case of a problem. You should adhere to these types of provisions if they exist, to ensure that the other party cannot rely on your failure to do so. If there is no such notification procedure, then you should notify your contact within the other party.

It is important to document the initial complaint in writing. However, it is generally not advisable for the initial contact to be overly aggressive or accusatory. Common sense should prevail in most cases but often a problem can be resolved quickly if the correct approach is taken. If you have a telephone relationship with the other party then a simple telephone call followed up by an email can be effective. Most parties want to continue their business relationships and will respond well to an amicable approach, where appropriate.

Keep Detailed Notes Of All Issues & Take Note All Correspondence Dates

Once a problem does arise, all correspondence on the issue should be retained including brief memoranda of all telephone correspondence and meetings. If there is visible damage to a product, then photographs should be taken. It is important to retain this information in the unfortunate event that the matter progresses and you require legal advice.

What To Do If The Issue Does Not Resolve

If the issue is not resolving by itself you should consider terminating your agreement. You should ensure that you terminate the agreement pursuant to any termination provisions in your written agreement; you may need to seek legal advice in this regard.

If, having made a commercial assessment, you cannot simply terminate the commercial agreement and walk away then you should seek legal advice as to the best approach to resolve or remediate your situation.

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