Step 1: Understand Your Dispute

Good business management involves good dispute management. A good understanding of your dispute will enable you to take control of the dispute and make an informed decision about the most appropriate way to resolve your dispute.

The steps set out below will enable you to better understand and resolve your dispute. The accompanying Dispute Characterisation section and Case Study section provide typical dispute scenarios and may also be of some use in understanding your dispute. These scenarios illustrate the type of disputes that are typically well suited to Alternative Dispute Resolution (ADR).

WHY DID THE DISPUTE ARISE?	list the sequence of events leading up to the dispute document the facts has the dispute escalated? why? why hasn't the dispute been settled?
WHAT ARE THE REAL ISSUES?	document the most important issues you need to resolve, in order of priority think about the issues from the perspective of the other party
WHAT DO YOU WANT TO ACHIEVE?	think in terms of your 'needs' rather than your legal rights consider the impact of your preferred outcome on all parties - is this reasonable? consider your preferred outcome in terms of impact on profitability, productivity, future business and personal relationships, time and resources will the preferred outcome resolve the dispute in the long-term?
REALITY TEST	play devil's advocate - are you being realistic about the strength of your position? is your preferred outcome a reasonable proposition? discuss the dispute with a trusted adviser - do they agree with your position? are you allowing anger or disappointment to cloud your perspective?

 

DISPUTE CHARACTERISATION

What types of disputes commonly arise in Small Business?

In every small business, disputes will arise as part of your business relationships with suppliers, landlords, partners, or customers. The types of disputes vary by industry, however they generally fall into a number of broad categories.

FINANCIAL

The fundamental cause of business disputes is poor profitability. The reasons for a decline in profit can be market driven or resulting from the actions of one of the parties, either way it often results in disputes over the ability and/or willingness to pay accounts. Refer to case studies - Banking and Government.

BREACHES OF SPECIFIC TERMS OF THE CONTRACT

Contracts can vary from a simple supply agreement to a more restrictive business format franchise, however, they all place obligations on the parties to meet performance standards. Disputes may range from serious (eg. breach of termination provisions) to every day disputes (eg. involving the provision of goods and services).
Refer to case study - Franchising.

PRODUCTS

Goods or services are traded between suppliers and customers. Throughout the process disputes can arise regarding the quality, price, range, delivery, packaging, and customer service. Refer to case study - Supply Contracts.

LEASES

The relationship between landlord and tenant is often difficult and can result in disputes across a range of issues including rental, lease term, relocations, redevelopment, quality and maintenance, renewals, annual increases, fit-outs, and terminations. Refer to case study - Retail Tenancy.

MARKET PLACE

Rapid changes in market conditions, including the introduction of new products and technologies, place great pressure on small business to cope. As competition increases sales and margins can decrease, having a negative impact on the business relationships of small operators and providing a fertile breeding ground for disputes.

RELATIONSHIPS

Although there are often business factors influencing the breakdown in a business relationship, a breakdown may result from a fundamental disagreement over the growth or direction of the business which will need to be resolved for the business to operate effectively. Refer to case study - Partnerships.

DECEPTIVE AND MISLEADING CONDUCT

These disputes usually arise when a recently acquired business fails to meet the expectations of the purchaser/operator. Disputes typically focus on the disclosure and offer statements at the time of purchase.

UNCONSCIONABLE CONDUCT

Involves the abuse of power in a commercial relationship by the dominant party who deliberately takes advantage of the weaker party to gain a commercial advantage.

WORKPLACE RELATIONS

This covers the whole range of issues including such areas as unfair dismissal. Refer to case study - Workplace Relations.

INTELLECTUAL PROPERTY

Breaches of intellectual property and copyright.