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Resolving Business Conflicts; Options Beyond the Court Room

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Resolving Business Conflicts; Options Beyond the Court Room

By NicoleD
Published: March 23, 2010 Updated: February 11, 2011

Heading to court to resolve business conflicts can be costly, time consuming, and even damage your business's reputation. If you're facing disputes with an employee, customer, vendor, or partner, you have conflict resolution options beyond litigation.

 

Alternative dispute resolution, or ADR, is a popular method of settling differences through arbitration or mediation. Depending on the severity of your situation, you may choose to American Arbitration Association* (AAA) or the Global Arbitration and Mediation Association (GAMA) sites for more information, or to find an arbitrator in your area.

 

 

Non-binding Arbitration
In non-binding arbitration, neither party is legally bound to an arbitrator's decision. As a result, non-binding arbitration is less common as an ADR because the losing party is not required to concede and carry out the arbitrator's request.

Tip:Many contracts now state that binding arbitration will be used to settle disputes that may arise while carrying out the terms of the contract.

 

Mediation
Mediation is another ADR, and slightly different from arbitration. In mediation, a neutral third party attempts to bring the disputing parties to the table for negotiations. The mediator facilitates communication between the parties by determining mutually-acceptable rules for negotiation, but does not deliver a decision as an arbitrator would.

While no legal decisions results from mediation, the disputing parties often come to a compromised agreement that may be ratified as a contract amendment.

 

Tip: FTC.gov guidance on how to *Note: Link directs reader to non-government Web site.


*Note: Link directs reader to non-government Web site.

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