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Business Contract Disputes: Alternatives to Litigation

contract dispute.jpgIn today's world, business or contract disputes arise in a variety of forms. Business disputes can range from unfair competition to violations of trade secrets. Contract disputes often involve breach of contract, rescission, reformation and even subrogation, among others issues. But many businesses are unaware of the several alternatives to filing a lawsuit to settle such a dispute.

These alternatives are broadly referred to as "alternative dispute resolution." These methods are available to entrepreneurs and consumers alike without the need for initiating the costly process of litigation. This may be the perfect choice for businesses where proprietary information, trade secrets, or various other confidential information are at issue, and the business does not want the public or media having access to such information and/or allowing for competitors the opportunity to misappropriate the confidential information.

Types of Alternative Dispute Resolution

This category of alternatives includes:

  • Mediation: This involves a neutral third-party mediator who assists in resolving the dispute between you and the other business. However, whatever decision the mediator makes, it is non-binding on either party;
  • Arbitration: If mediation is not enough to settle the dispute, the parties can move on to arbitration. This type of dispute resolution involves a neutral third party who considers both sides of the dispute and awards a binding judgment. Commonly, the decision cannot be appealed unless the option is included in the award by the arbitrator; and
  • Neutral evaluation: This process allows each party to present their case to a neutral third party, known as the evaluator, commonly an expert in the field or subject matter of the dispute, who gives his or her opinion on the strengths and weaknesses of each party's case and might suggest the best way to resolve the dispute.

Benefits of Alternative Dispute Resolution

Alternative dispute resolution provides a fast resolution to disputes, cost savings for both parties, allows the preservation of business relationships, protects confidential information, and allows for more creative solutions to complex issues. Choosing to use the legal system to solve your business contract dispute will generate a winner and loser, and judgments rendered by the legal system may not solve the problem and are usually inflexible. If you decided to pursue litigation, many of these benefits of alternative dispute resolution will not be realized, and you will destroy business relationships as well as expose your proprietary information to misappropriation.

Disputes are costly, no matter which avenue you choose to travel when resolving yours. Alternative dispute resolution provides you with a fair, quick and amicable resolution that will protect your business and relationships.

Consult an Attorney

If you are involved in a business contract dispute, you should not hesitate to contact an experienced San Jose business law attorney who will protect your business and get you the results your business deserves.

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