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By Sanjeev Kumar
Founding Attorney

Is alternative dispute resolution the right method to resolve my business dispute?

Business owners will often eventually find themselves involved in some form of dispute with a business partner, an employee, vendor, customer, contractor, or others.  Business disputes can be stressful and potentially involve high stakes.  For the busy small business owner, litigating a dispute at trial is rarely the ideal method of resolution.  Instead, most business disputes are resolved through some form of alternative to ligation, with the most popular options being mediation and arbitration.  At times, one method will be required per the contract governing the dispute.  Our Austin, Texas ADR business lawyers explore the basics of alternative dispute resolution and how you can find the ideal method to end your dispute below.

Arbitration Basics

Arbitration involves submitting one’s business dispute to an impartial person who will issue a final and binding decision on the matter.  Arbitration differs from mediation in that the arbitrator has the ultimate say on the issue.  The mediator, on the other hand, works with the parties to achieve an agreement, but the control still lies in the hands of the parties.  

During arbitration, both parties will have the opportunity to present evidence.  The process is more formal than mediation, but does not involve the legal rules of evidence or other strict formalities of a courtroom trial.  Arbitration may be preferred over mediation for several reason.  While mediation is typically the quickest and cheapest option to resolve a dispute, in certain situations mediation is unlikely to be successful.  Where the parties are not capable of communicating with one another, even with the assistance of a mediator, mediation may be a waste of time and energy.  Arbitration, on the other hand, will without a doubt result in a final and binding decision.

Often, the parties to a business dispute will be forced to use one settlement method over another, with arbitration more likely to be required in many contracts.  Anyone who is involved in a business dispute should closely weigh their options when it comes to dispute resolution methods.  Contact a business dispute resolution lawyer for assistance with determining how you can best resolve your business dispute as soon as possible.  


About the Author
Sanjeev Kumar is the founder and principal at the Kumar Law Firm, which provides a wide range of legal services to entrepreneurs and business owners in the area of business & corporate law and intellectual property along with related areas of interest to clients such as business succession planning, wealth preservation through estate planning, and alternate dispute resolution.