How to avoid disputes

Even the best managed businesses can sometimes find themselves in dispute with customers, suppliers, partners or employees.

Resolving disputes can take a lot of time and effort, which could also affect running your business. It is advisable to take steps to avoid disputes completely, or if they do arise, they can be resolved quickly, with minimal cost and impact on business relationships.

Tips to help you avoid disputes

  1. Confirm details in writing
    Most disputes occur because there is no clear agreement, contract, policy or procedure in place for parties to refer to. This can be avoided by having a written agreement or contract in place before you supply (or buy) goods or services.

    Make sure all terms, including payment details, are included in the agreement and that it is signed by all the parties involved.

    If you need to vary the agreement or contract ensure the variations are also put in writing and agreed to by all parties. This may be as simple as obtaining an email confirming acceptance of the variation or something more formal.

    Business policies and procedures should be developed for employees and contractors to avoid future disputes. Employees should also have an employment contract.

    It is advisable to seek legal advice when you are developing contracts.

  2. Read contracts before signing them
    If you sign a contract you will usually be bound by its terms and conditions. Make sure that you read and understand all contracts before signing and seek legal or other professional advice if you do not understand any of the terms.

    Do not rely on information from the other party as to the meaning and effects of the contract.

  3. Develop good communication and relationships
    Having good communication and relationships with your customers and suppliers will help to avoid disputes. Make sure they know how to provide feedback to you if something is not right and, if you do receive complaints, make sure you deal with them promptly.

    Be honest with your customers if your business is at fault. Also don’t ignore problems – it will only make matters worse.

  4. Be organised
    Keep copies of all your signed agreements and contracts in one place so they are easy to find.

    Have a system to remind you of key dates and details included in the contract so you don’t breach any terms and conditions. Don’t file and forget as it could lead to a dispute down the track.

  5. Train your staff
    Staff should be trained in how to handle customer complaints or negative feedback in an appropriate and professional manner. Develop and document a complaint handling process for staff to refer to if required.

    Ensure all staff are aware of the scope of their authority to enter into contracts on your behalf.

  6. Know your legal obligations
    There are many legal obligations you must be aware of when operating a business. It is important to understand and comply with these obligations in order to avoid disputes and additional costs for your business.

  7. Seek help early
    Don’t wait for a problem to occur. Seek assistance and feedback from your lawyer, accountant or professional business adviser to ensure you have good systems in place to minimise the potential for disputes.

More information