7 Tips To Prevent And Manage Disputes In Business

Commercial disputes are bound to occur when transacting business with other parties. Conflicts happen with or without measures put in place to prevent disputes. How you solve them is what’s important; and before they happen, did you try to avoid them? The process of avoidance and managing arguments isn’t a challenging task, as this article will show you. Conflict prevention can’t be achieved by only one of the parties—all must work jointly. 

Consider the following to prevent and manage business disputes: 

1. Sign Contracts On Any Partnership 

Contracts are meant to define any relationships, in this case, business relationships. It can be with your bank, business, retailers, and others. Each of these relationships has a form of contract such as terms and conditions for banks. Conflicts may arise due to fraud, which may require chargeback management, lawsuits, and settlements to resolve them. Therefore, it’s essential for the agreement to be clear enough not to leave any room for misinterpretations. 

Ensure to draw up contracts with your business partner, suppliers, stakeholders, and employees. The agreement should define the roles and responsibilities of each party, termination terms of your partnership, division of any profits, liability, equity, ownership of any intellectual property, and others. You should discuss any issue that could be a possible source of conflict. The agreement should be written down and signed by all the parties involved. 

In case of any disputes, the resolution process is reduced with a contract since all parties are aware of what’s expected of them from the beginning. 

2. Do Business With The Right People 

It’s vital to get into partnerships with people you can trust and those with a history of good business ethics. This is specifically important when getting into business partnerships. 

For your workers, ensure you vet them properly before employing them. Do a background check on them and check with their previous employers to know how they carry out their assigned duties. You don’t want to have a team member that constantly argues or finds it difficult to solve issues calmly. 

Choose suppliers that have a good reputation and deliver their services efficiently. Seek referrals and reviews from previous and current clients of your preferred provider before making a decision. 

3. Document All Business Activities 

Make it a habit to document all your business activities, from transactions to new agreements to the minutes of any meetings held. Once you have them all documented, ensure that you store them safely. For any communication done through email, refrain from deleting any. 

Such documentation could be what will save you from lawsuits or liabilities in the future. In case of any disputes, the documents will stand as evidence to the other parties and before a court of law. 

4. Practice Proper Communication 

Poor communication is often the root of most business misunderstandings. Proper communication means using the right channels of passing on a message to the other party. It’s essential to use formal communication channels such as letters or emails, instead of via text or verbal agreement. As previously stated, proper communication channels provide evidence in any case of an altercation. 

Communication also entails transparency in your daily business operations. Be open to your business partners, shareholders, suppliers, and workers despite the nature of the message, good or bad. If you’ve experienced a financial hiccup and you can’t afford to pay your suppliers, inform them beforehand and come to an understanding. The understanding should be documented, as previously stated. 

Conflicts may be reduced to a bare minimum when all parties communicate openly and honestly. 

5. Understand Contracts Before Signing 

Though often overlooked, it’s critical to read a contract you’re entering into and understand all terms. Have your legal representation go through the document with you and clearly explain the agreement and liabilities you’re likely to face in case of a breach. 

With a read contract, you’re able to request new terms if they aren’t favorable to you, instead of blindly settling on what’s presented to you. You’re also made aware of what’s expected of you beforehand to avoid breaches. 

6. Have Informal Dispute Resolution Procedures In Place 

It’s essential to formulate an informal resolution process instead of going to court to sort out all your issues. Court settlement of disputes is often expensive and can take a long time to resolve. 

Have a sit down with the other involved parties and agree to a conflict-solving plan that you’ll use. The parties include business partners, workers, suppliers, and other stakeholders. Informal conflict resolution solves issues promptly, saving each of you time and money. 

7. Solve Issues As Soon As They Present Themselves 

A majority of significant conflicts arise from minor incidences that have happened before and are often ignored and swept under the rag. These ignored issues, more often than not, come out to blow in the faces of the parties involved. Therefore, it’s vital to have those difficult conversations regarding any pressing matter in the early stages, no matter how small. Consider including a neutral third party in their solving who’ll give unbiased resolutions to the problems. 


Commercial disputes can be easily avoided and managed with the proper tools. All parties involved should practice honesty and transparency in all business operations. With the guidance given in this article, conflict management has been made easier for your business. 

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