Has a contract you entered into been breached by the other side? Are you accused of breaching the contract yourself? If so, litigation in a court of law may seem like the only way to end the matter. But could your case be better resolved through alternative dispute resolution? The answer may be yes, and here's why.
1. It's Faster
Contract disputes can be expensive, and they often have immediate effects which get worse very quickly. If your supplier has effectively already made it clear that they will not fulfill your order, you need to secure replacement inventory as soon as possible. Waiting to hash it out in court means you lose money, customers, and a good reputation.
On the other hand, dispute resolution can begin now, and it usually takes less time to reach a solution. When time is of the essence, this can be more valuable than a potentially larger financial award after the damage is done.
2. It Protects Your Reputation
Going to trial — as the defendant or the plaintiff — means you open up your business activities to public scrutiny. The process of discovery opens up many documents, statements, and other evidence potentially relevant to the contract. It may require you to sit for depositions and give testimony. And court records are public records for all to see. If any of this could expose you to reputation damage, it's best to keep things private.
Out-of-court negotiations and agreements are private matters. Your customers and business associates will not know what is discussed or agreed upon. You don't have to look like a bully, a bad business person, or a victim in everyone's eyes.
3. It Provides Alternatives
A judge or jury has a limited range of solutions to provide even if you win in court. In most cases, financial damages are awarded based on how you've already been harmed and will continue to be harmed in the future. However, could you benefit more from some other solution to your contract problem?
Perhaps, for instance, your supplier could provide orange widgets instead of the purple ones you ordered. Maybe you and they can come to an agreement about who pays for (or how to share) the cost of painting them purple. The court generally can't order you both to comply with these conditions. But a mediator can help you see the value in doing so. Then, your business avoids lasting financial harm in the first place.
Where Can You Learn More?
Could dispute resolution make the most sense to solve your contract dispute? Find out by meeting with an attorney in your state today. While it may not carry the same excitement as having your day in court, it can help you move forward with minimal loss.