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Advantages and Disadvantages of Using Negotiation for My Commercial Dispute

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As a business owner running your company, you will only sometimes agree with all businesses you work with. Sometimes, disputing parties can resolve minor disagreements reasonably and efficiently. However, occasionally, these disagreements can turn into more serious commercial conflicts. One process to settle commercial conflicts is mediation, and another is through negotiation. This article will explain the advantages and disadvantages of using negotiation for your commercial dispute.

What is Negotiation for My Commercial Dispute?

Negotiation is a form of Alternative Dispute Resolution (ADR) for resolving a commercial dispute. People may refer to this as a negotiation settlement or a negotiated settlement. This is usually the preferred way for any business like yours to resolve a commercial dispute. 

An impartial third party helps you and the other party negotiate to reach a conclusion and move forward. They do this during the discussions between you both.

To avoid lengthy and expensive disputes, it’s important to have up-to-date legal contracts in place. Our contract lawyers can review and update your contracts to ensure your business is protected. Book a complimentary consultation today by filling out the form on this page.

What Are the Advantages and Disadvantages of Using Negotiation for My Commercial Dispute?

Negotiation as a method for resolving a business disagreement has advantages and disadvantages. We will explore some of these below to help you decide if negotiation is appropriate for your commercial dispute.

Advantages of Negotiation for Commercial Disputes

One of the advantages of using negotiation for your commercial conflict is that it is quick and relatively inexpensive. This means you can continue your commercial activity and avoid losing significant business funds. Although it can take longer than you anticipate, it is still quicker than commercial litigation. 

Another significant advantage of using negotiation for your commercial dispute is the effect on your relationship with the other party. If you can resolve the dispute amicably with the other party, you can continue a good working relationship and reduce the risk of jeopardising this. Or, if the dispute is with a business new to your company, you may keep your recently gained new client. 

Negotiation can also benefit your business when your evidence in the dispute could be stronger. Where this is the case, you are unlikely to find commercial litigation helpful as a court relies on evidence to resolve a dispute. Therefore, negotiation may be a good option.

Out of all alternative dispute resolution methods, negotiation is the most informal and flexible, making it an advantage for commercial disputes. It is also confidential like other alternative dispute resolution methods, so unlike commercial litigation, you will not receive any unwanted publicity. 

Another advantage of negotiation for your commercial dispute is that it can resolve the business disagreement. This is the settlement of the commercial conflict and is legally binding, as is a court judgment. A negotiation settlement will likely benefit you and the other party by costing less than a court settlement.  

Disadvantages of Negotiation for Commercial Disputes

A disadvantage of using negotiation for your business conflict is that it may fail. Instead, your business may need to take up another form of dispute resolution. This will often be more formal, such as meditation. It may be, for example, that negotiation does not result in an agreement between you and other business. 

A further disadvantage of negotiation for your commercial dispute is that it has less legal protection than other dispute resolution methods. For example, although confidential, this is not a legal obligation between parties. In comparison, confidentiality is a legal obligation within arbitration, another form of alternative dispute regulation. 

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In contrast, negotiation depends on mutual trust between all parties involved. 

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Key Takeaways

If you find your business in a commercial conflict, you may choose negotiation to try to resolve it. Negotiation or negotiation settlement is a form of alternative dispute resolution (ADR) where a neutral third party facilitates discussions with you and the other party to try to settle. There are advantages and disadvantages of commercial negotiation. Advantages include, for example, that it is quick and not too expensive. Also, it helps to keep the relationship between you and the other party amicable. There are also disadvantages to commercial negotiation. These include that it may not succeed, causing you to use another dispute resolution method. 

If you need help understanding the advantages and disadvantages of negotiation, LegalVision’s experienced disputes and litigation solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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Clare Farmer

Clare Farmer

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