Resolving business disputes

Disputes arise from time to time as part of doing business. They can range in severity and, depending on the complexity, can cost time and money.

Resolving business disputes quickly and efficiently is in everyone's best interest. While you should try to resolve disputes yourself, sometimes you may need to seek help from others.

Steps to resolving business disputes

There are 5 common steps to resolving business disputes.

Step 1: Understand the dispute

Understand your legal requirements and check your contractual obligations carefully. There may be certain arrangements about how disputes must be addressed.

Identify the key issues behind the dispute. Keep track of events that happened before the dispute and try and clarify any misunderstandings. Read contractual obligations (these may be the terms and conditions you agreed to by ticking a box or in a written contract) carefully to ensure you have understood the scope of what was agreed. Your contract may have specifically addressed how disputes must be resolved.

Step 2: Talk to the other party

Good communication is key (both over the phone or face to face). Stay calm and make a genuine effort to work with the other party to resolve the dispute amicably.

It's in both of your interests to be prepared to negotiate and compromise an agreement.

Keep a written record of any discussions for future reference. It's good practice to send a follow up email asking the other party to confirm that what is written reflects their understanding of what was said or agreed. State that if you don't receive a response within a reasonable (specified) time, then you'll take it that this follow up summary was accurate.

Step 3: Write to the other party

If you have negotiated an agreement, put it in writing using neutral terms that you both agreed to and understand. You should all sign the agreement and ensure everyone has a copy of the agreement signed by everyone (an executed copy).

If you are still in dispute, put your concerns in writing but ensure you stick to the undisputed facts, be reasonable and avoid blaming (or emotional) language. Allow the other party to consider your point of view and give them time to respond before you do anything else.

If you're having problems with a product or service provider, use this letter of concern template to let the supplier know about the issue and provide them with an opportunity to resolve the problem. If the dispute relates to an outstanding payment, use this letter of demand template to let the person or company know about the issue and provide them with an opportunity to resolve the problem.

Step 4: Seek help from a third party

There is a range of assistance available to help small and medium-sized businesses resolve disputes. Alternative dispute resolution (ADR) involves an independent third-party who works with both parties in dispute to help them find an amicable agreement. ADR is undertaken before going to a tribunal (e.g. the Queensland Civil and Administrative Tribunal) or court.

The goal of ADR is to help you to find a solution that is agreeable to you both. This process may include informal assistance, mediation or other options.

Use our dispute assistance finder to understand which service you should contact to help with your dispute.

Step 5: Go to court or tribunal

If your dispute is unresolved after seeking third party assistance, you should seek independent legal advice about your other options.

While some disputes may be heard by a tribunal or court, you should consider this carefully as it can be very expensive, time consuming and stressful.

Dispute assistance

Once you have made a genuine attempt to resolve a dispute using the steps above, you may be able to request assistance from a third party. In some disputes this may involve applying to a state or federal ombudsman or commissioner.

The service you choose will depend on the nature of your situation. Most government agencies, ombudsmen and commissioners can't decide disputes or take them to court on behalf of one party. Often they provide access to ADR before a party to the dispute takes their own legal action in a tribunal or court.

Dispute assistance finder

Use our dispute assistance finder to help you determine the most appropriate service for your situation and how you can seek help.

You must ensure that you have taken steps to resolve your dispute before approaching a third party for assistance.