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Litigation Blog.
The seasoned lawyers and litigators at The Rubinstein Law Firm are here to share their insights with you.

How business disputes are resolved: The basics

No business operates fully independent of anything else. Even basic computer software or vital work supplies require some type of transaction. As a business grows, these simple exchanges can evolve into contractual agreements between two parties for products or services.

These agreements, however, don’t always work out. Maybe your contractor abruptly stops providing what you had agreed upon, or a company that utilizes your business for a service decides to halt payments. What happens in these situations? The parties will need to resolve their dispute somehow, usually through one of these four methods.

Informal negotiation

Nothing prevents two disagreeing parties from simply coming up with a solution themselves. This means both sides will talk – with attorneys present if they’d like – in order to reach a satisfactory deal. Once a deal is struck, it is a good idea to have it presented in writing, then signed and dated by both parties.


Mediation is essentially a step up from informal negotiation. Instead of the two parties discussing things on their own, mediation brings in a third-party mediator trained in dispute resolution. This person facilitates the conversation, provides guidance and offers potential solutions. A mediator does not make any decisions or rulings. They are simply there to help the parties reach an agreement.

Mediation is generally done in private, with both sides covering the costs.


Arbitration is a more formal form of dispute resolution. In arbitration, both sides submit their arguments and evidence to a panel of arbitrators. Those arbitrators take everything in, review the case and issue a decision themselves. This decision is often final.

The terms of arbitration – including how arbitrators will be selected and the rules of the proceedings – may be spelled out in the agreement previously signed by both parties. Or it might require some discussion. While it might sound risky, it is an effective method for resolving a difficult issue quickly and cost-effectively so everyone can move on.


Many business owners view litigation as a last resort. Bringing the case to court and putting it in the hands of a judge (or, in some cases, a jury) can be costly and take a long time. However, sometimes it’s the only way to protect your business. This can be true for particularly egregious issues that require some immediate court-ordered protections, or for complex disputes that can’t be resolved in other ways.