MBT | McKay, Burton & Thurman, P.C. | Attorneys At Law

How can organizations tackle challenging contract disputes?

On Behalf of | Jul 12, 2023 | Business Law

Contract disputes often start small, possibly due to delays in product delivery. However, they can quickly spiral out of control. Attempting to resolve a contractual matter in civil court can result in additional lengthy delays during which the issue in question remains unsettled. Additionally, it can be both expensive and embarrassing to have the details of business disagreements become part of the public record, as is generally the case when parties present evidence in court.

The frustration and expense involved in contract enforcement can be so significant that it may deter those with a strong case from taking action. What business owners and executives often fail to remember is that they don’t have to choose between court or doing nothing. There are alternative means of settling disputes. For example, mediation can be very effective in re: resolving conflicts related to contracts.

Mediation keeps dispute details private

The more that a company exposes about its daily operations, the greater the risk of competitors abusing that information or of consumers altering their opinion of the company. For example, a lawsuit brought by former employees about alleged contract violations or an attempt to enforce restrictive covenants in an employment contract could draw negative attention and damage a company’s reputation as an employer. The mediation process is typically confidential, which means that both parties can talk openly about the conflict without concerns of reputation damage later.

Mediation can lead to a faster resolution

Depending on the volume of cases going through the courts, it could be months before those with a contract dispute get to present their side of the story to a judge. It can be much faster to schedule a mediation session with both parties, their individual lawyers and a neutral mediator. Even if it takes more than one meeting, it may be possible to reach a compromise that works for everyone involved in the dispute weeks before they would be a chance of going to court. Handling the matter more quickly via mediation can also mean resolving it with fewer expenses that will affect the business’s bottom line.

Of course, mediation only works when both parties agree that there is room for compromise in regards to a particular matter. Considering every possible solution for resolving a contract dispute may help an executive or business owner limit the costs and other losses generated by a disagreement about a contract, whether mediation in particular is a viable option for their unique circumstances or not.