As an entrepreneur, in the first few years of your business the disputes you encounter may not (and hopefully will not) have a large dollar value. Smaller value disputes still need to be managed in a way that minimizes impact on your time, reputation and business, even if legal advice isn’t necessary.
1. Don’t outsource understanding. It can be difficult to interact with the parties on the “other side”, however the dispute cannot be effectively resolved until you (and ideally both parties) understand how each party would like to resolve the dispute. How you manage the dispute will depend on the amount of the claim. For instance, the Small Claims Court in Ontario can handle any claim where the claim amount is $25,000 or less. Push past any discomfort surrounding the dispute and seek first to fully understand.
2. Draft a simple, clear demand. If the claim amount is fairly small and you encounter difficulty obtaining a response from the other party, consider drafting a simple and clearly written demand. Refrain from including any extraneous facts, opinions, justification or commentary about your demand. Simply state, “I will require a payment of $X from you by Y date.” With a demand in writing, the other side can’t claim to be unclear about your needs.
3. Get your BATNA together. “BATNA” means “best alternative to negotiated agreement.” This is your fallback position, the course of action you can take if your discussions regarding the dispute with the other party don’t succeed. If the dispute becomes difficult to resolve remember that any outcome that’s superior to your BATNA is worth considering.
4. If you're not in court don't put the other side on trial. Keep in mind the French expression "Better a poor agreement than a good trial." The person or company you're in conflict is part of the business community and will still be linked to you or your business, even if only by reputation, after the dispute is resolved. Although you may not be satisfied with the other party’s actions, antagonizing them could jeopardize your reputation and relationship with future clients and business partners
5. Communication is key. Disputes most often result from a basic lack of “meeting of the minds”, where the parties’ intentions does not ultimately match the language of the contract in dispute. For instance, you both signed the same contract but have different views about what a certain provision in the contract really means. Many clients would be surprised to know how frequently a dispute can be resolved, or at least eased somewhat, by an apology or other communication indicating that you have taken the basic step of thoroughly considering the other party’s needs.
Helgi Maki has practiced corporate law for over ten years, and is qualified to practice in Ontario and New York. As a partner at Bennett Jones LLP she strives to act in the best interest of clients by enabling them to find the most efficient and effective ways to deal with business law issues and lawyers.