As the recession is far from being over it is inevitable that disputes are going to be an unfortunate fact of life. Commercial disputes can be costly both in terms of money and time, when, if dealt with correctly they could potentially have been avoided.
Litigation and dispute resolution has and will continue to play a crucial role during this recession. To help avoid long and timely disputes we have put together some simple steps for you to consider when agreeing to or signing any new contract or entering into any new business relationship:
Well Drafted Terms and Conditions – If your terms and conditions are clear there can be no dispute over the meaning of such terms and conditions.
Retention of Title Clause – This provides protection if the purchaser becomes insolvent. It can also have a similar effect for intellectual property rights; to re-vest in the event of non-payment or insolvency.
Communication – In any business, communication should be of paramount importance. Ensure that conversations, whether over the telephone or even whilst just having an informal chat over coffee are well documented.
Clear Lines of Authority – You need to make sure that you understand the extent of any obligations before you take them on.
Avoid False Economy – In times of financial hardship it can be tempting to avoid paying out for the advice of a professional but self-help has its own limits and without the correct advice it can ultimately end up costing you more if a dispute arises.
Risk Analysis – It is always a good idea to review and update contracts regularly but always keep in mind that any changes must be communicated to and agreed by all parties.
Understanding – It is important that you clearly understand the area of business in which you operate and for which you are responsible. It may be tempting to take on work in new areas, but do you have the skills to do it?
Commercial disputes affect virtually every kind of business or public authority at some time, by following the above you are reducing your risk of a dispute arising.
If a dispute does arise we would suggest you take legal advice as early as possible, this could end up saving a huge amount of time and money in the long run.
Litigation can be costly and time-consuming, and serious cases can influence a company’s ability to continue trading. Rapid, effective dispute resolution is therefore not only necessary but essential to avoid any negative impact on not only your reputation but also on your businesses long term future.