Commercial disputes occur frequently among businesses partners, vendors, clients, etc., primarily due to unmet expectations, ambiguous terms of an agreement, or a failure of effective communication. The ability to resolve commercial disputes is important because they can hinder business operations, but poor dispute resolution strategies can also harm trust and reputations over time. Good dispute resolution strategies can protect both the financial and relational aspects of business relationships. Effective use of structured negotiation, clear and open communication and impartial evaluations can effectively resolve disputes while maintaining the partnership aspect of the relationship.
Manage Issues as Soon as Possible
The longer an issue is ignored, the greater the likelihood that it will become more difficult to manage and may eventually lead to an escalated situation. The sooner issues are addressed, the less likely there is to be a negative emotional response to the issue.
Some best practices include:
- Identify the central issue (the “core” issue)
- Review your contract terms
- Schedule a meeting to discuss the matter directly
Early intervention helps to avoid the potential for miscommunication and unnecessary delays.
Seek Solutions Based On Your Interests, Not Your Position
Stalemate situations result from rigid positions taken by each party involved. When you identify your underlying interests, you may find that you have more room for flexibility and compromise.
In order to negotiate successfully based on your interests, both parties need to:
- Identify what you want to achieve (desired outcomes)
- Distinguish between facts and assumptions
- Examine possible mutually-beneficial changes
An interest-based negotiation will enhance the chances for successful solutions.
Practice Professional Communication
Your tone of voice affects how successful you are at resolving a dispute. Poor communication, including emotional reactions, harms credibility.
To practice professional communication:
- Speak using respectful language
- Maintain accurate and complete records of communications
- Refrain from reacting emotionally; respond calmly
A calm demeanor is essential for constructive negotiation.
Consider Mediation or Neutral Assistance
If you have been unable to reach a negotiated solution through direct negotiations, consider engaging a mediator who is impartial to assist you in reaching a solution.
Mediation provides clarity regarding misunderstandings and assists in restoring dialogue.
Using an outside facilitator can aid in preserving your relationship.
