Skip to content

Advantages and Disadvantages of Using Negotiation for My Commercial Dispute

Table of Contents

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. 

Front page of publication
Guide to Resolving UK Business Disputes

This guide outlines how to resolve commercial disputes.

Download Now

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

Continue reading this article below the form
Need legal advice?
Call 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.

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.

Register for our free webinars

Sweat Equity: Helping Your Startup Grow

Online
Discover how sweat equity can support your startup’s growth. Register for our free webinar today.
Register Now

Selling a Business: Tips for a Successful Sale

Online
Selling your business? Learn essential tips to reduce risk and achieve a successful sale. Register for our free webinar today.
Register Now

How to Recover Unpaid Debts from Customers and Suppliers

Online
Struggling with unpaid debts? Discover your options. Register for our free webinar today.
Register Now

Preventing Employee Competitors: How to Protect Your Business

Online
Learn how to protect your business from employee competitors. Register for our free webinar today.
Register Now
See more webinars >
Clare Farmer

Clare Farmer

Read all articles by Clare

About LegalVision

LegalVision is an innovative commercial law firm that provides businesses with affordable, unlimited and ongoing legal assistance through our membership. We operate in Australia, the United Kingdom and New Zealand.

Learn more

We’re an award-winning law firm

  • Award

    2024 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2024 Law Firm of the Year Finalist - Modern Law Private Client Awards

  • Award

    2023 Economic Innovator of the Year Finalist - The Spectator

  • Award

    2023 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2023 Future of Legal Services Innovation - Legal Innovation Awards