How to Handle Legal Disputes with Other Businesses

It is a sad fact that in today’s business climate, we will almost all run into a legal dispute with another business.  Even in the online world, there are many situations in which legal disputes can arise with other companies.  Here are some steps you can take to make the experience as painless as possible.

Prevent It With Detailed Contracts

The best option is to never have a legal dispute. When working with another business, have very detailed, signed contracts in place that explicitly detail each party’s responsibilities and expectations.

There are some costs to having a lawyer draft or review a contract, but those costs are usually much less than going to court. The potential time, stress, and financial savings are huge when you have a good, written contract.

In some cases, email agreements will suffice. In some, verbal agreements would be considered a legal contract if you have evidence of the conversation. Even a contract written and signed on a napkin can count. However, to make sure you’re safe, you should always have a physical copy of a formal, printed, signed and counter-signed contract.

Try to Resolve It Directly

The cheapest and often easiest way to resolve a legal dispute is to avoid the lawyers and the courtroom. Just offer to sit down and have a face-to-face discussion to find an equitable resolution to your issue.

Lawyers can easily cost $150 to over $1,000 per hour. Even if you win in court, it is likely you will never be reimbursed for your lawyer’s fees. You still have to pay those out of pocket.

For most disputes under a few thousand dollars, it may never be worth the cost to hire a lawyer, so if you want to get anything back, you should try to negotiate a settlement with the other party directly.

Small Claims Court

If your case qualifies for small claims court, you may consider filing a suit there and representing yourself. Limits for small claims courts vary by state and range from a $2,500 limit to a $25,000 limit. Here is a list of limits by state.

In some states, you are allowed to bring a lawyer with you, in others, you may be required to represent yourself or follow other complicated rules to bring on a lawyer.

I’ve gone to small claims court once myself and had an interesting experience, but it was for a personal matter. From my experience, if you do decide to go to small claims court, do tons of research on the laws and precedents and be ready to answer any question from the judge or magistrate that presides over your case.

Hire a Lawyer

If you have a material impact to your business or a large dollar value in dispute and can’t settle it yourself, it might be time to call in the big guns. A professional, experienced, licensed attorney is the best option if you have a serious claim.

Remember, lawyers are expensive and not all lawyers are created equal. Find the right representation for your case and shop around for the best option that meets your needs.

Disclaimer: Please note, I am not a lawyer and this post should not be considered legal advice. If you are in any doubt, contact a licensed legal professional right away to ensure you are in no way 

Have you ever had to deal with a legal dispute?