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What are the potential costs of a business dispute?

On Behalf of | Jan 30, 2025 | Business Law |

It would be foolish to expect everything in business to go smoothly. It won’t. Whatever your field, you need to be prepared for the chance that problems will occur.

When considering how to act in a dispute, it is important to consider the potential costs of the various options:

Productivity costs

Spending your time and brain power on a dispute means you will have less to spend on progressing your business. Sometimes a quick solution that allows you to get back to focusing on the business as soon as possible is better than a long drawn-out one that proves you are right.

Relationship costs

Good relationships take time and effort to build and can be difficult to replace. Apologizing and forgiving are more likely to preserve a relationship than blaming and suing. While sometimes tough legal action is the best course, you should always consider what the relationship is worth to you before choosing your course of action.

You should also consider your relationships with others who are not directly involved. Customers and potential business associates can sometimes be put off if they don’t like how a business handles itself in a dispute.

Legal costs

If your dispute were to reach court, both parties would face legal costs. If you were to lose, you may become responsible for the other party’s costs as well as your own and any penalties the court handeddown. An out-of-court solution can sometimes (but not always) be a better choice.

Spending the time and money to draw up appropriate business contracts and review and adjust them when necessary might seem prohibitive when you are uncertain how well your business idea will work. Yet the costs of not taking these measures could be far greater in the long run.

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