Disputes in business are almost a guaranteed part of the landscape. Some more well-financed enterprises hire risk analysts to predict disputes and determine strategies to prevent or resolve issues before escalation.
Business disputes generally fall into two categories: disputes within a business and disputes between businesses. Disputes with customers are also common and are considered disputes within a business.
A dispute generally boils down to a breach of contract. Even in a partnership, the partnership agreement – if crafted correctly – is a binding document, and if one partner breaks the agreement it is similar to a breach of contract. A dispute between businesses also generally falls into the category of breach of contract. Even if you have a handshake agreement with a supplier, it can be considered an oral contract.
The best strategy when starting a business is to consult with our business law attorneys to get the appropriate documents in place, either a partnership agreement or articles of incorporation, and plan for dispute resolution within those documents. If one partner in a business decides to opt out, unless the company changes direction, the result could be a form of chaos.
Also, when negotiating with other businesses for products or services, consult with our attorneys to create an ironclad express (written) contract, which protects your interests and clears the obligations and rights of each party.
If you’re running a business in Murfreesboro or Berry Hill, Tennessee, and a business dispute arises, contact McCarter | East PLLC. Our attorneys can help resolve business disputes involving partnership issues, breaches of contract, or any other source.
Disputes within a business arise not only from partner disagreements but from employees. Employees can feel ignored regarding wages, benefits, or lack of promotional opportunities. Customers can also have issues with the products or services you provide.
Disputes between businesses not only involve breaches of contract – the supplier failed to deliver the products promised, or the supplier did and did not receive pay – but also competitive practices. Business A may hire away an employee from Business B and then steal a trade secret or piece of intellectual property.
Most business disputes hinge on some form of a breach of contract because most business transactions involve a contract of one sort of another. Employees working for you are assumed to be guided by an employment contract – a set of rights, responsibilities, and obligations you establish for them through an employee handbook or other means, even oral.
A partnership agreement is like a contract, similar in establishing the responsibilities, obligations, and rights of the partners. Providing services or products to customers can be contractual. You agree to supply something of value, and the customer agrees to pay for it. If one party fails to live up to an obligation, a breach of contract comes into play.
A contract, which can be express (written), oral, or even implied through continued interaction between two parties, basically consists of five elements:
Offer: This amounts to a promise and a demand. I’ll sell you my car once you tender me the asking price, for instance.
Acceptance: Both parties agree. The price is fair, and I’ll buy your car. Here’s the car.
Consideration: This is an extension of the offer component. What do I get if I sell you my car? What do I get if I tender the money you requested?’
Capacity: Participants must be of sound mind and of legal age.
Lawful Purpose: A contract cannot break the law. “I’ll sell you Joe’s car for X dollars once I steal it” is not a lawful contract.
A breach of contract occurs when one party to the agreement doesn’t live up to the components of the offer. A supplier who agrees to deliver 200 widgets every Wednesday and then fails to do so might be in breach of the contract absent extenuating circumstances. If the same supplier delivers the widgets as promised, but isn’t paid, that also could be a breach of contract but by the other party.
The four elements of a breach are:
The existence of a contract, whether express, oral, or implied.
Performance by the plaintiff or justification for non-performance.
Failure to perform to the contract’s terms by the defendant.
Resulting in damages to the plaintiff.
There are three means to resolve a breach or other types of business dispute: negotiations, mediation or arbitration, and litigation. Negotiations are certainly the most cost-effective, though the services of our skilled attorneys are needed.
Mediation and arbitration involve third parties who step in to help resolve matters. Mediation is a form of negotiation conducted by an outside professional trained in the art. Arbitration is more structured, and the arbitrator will at the end of the process issue a resolution after listening to all sides.
Litigation, of course, involves the filing of a lawsuit and then arguing the case in court.
If your business is involved in a dispute internally or with another business, act fast and don’t let it escalate to litigation. The attorneys at McCarter | East PLLC stand ready to discuss your situation and help advise you of your best options in moving forward to resolve the dispute. Contact us immediately if a dispute looms in your business operations. We serve clients in Murfreesboro, and Berry Hill, Tennessee, and can step in and help you achieve the best resolution possible.
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.