Business conflicts are part of standard business operations, and the business needs to focus on utilizing the most efficient way to resolve the conflict. The failure to complete contractual obligation is categorized as a breach of contract which can be resolved in the court system. In order to avoid extensive expense associated with the traditional court case resolution, the most efficient ways for business to handle disputes is to use the alternative dispute Resolution (ADR) method. Case Scenario
The following scenario demonstrates the breach of contract between two parties. John Smith is a businessman who purchased a piece of land that includes a building; the perfect site to set up his business. The building needs to be repaired and remodeled to fit Mr. Smith’s new business standards and be in compliance with the state laws. Mr. Smith hires a local contractor, ABC Remodeling Services, to do the work. They both met to talk about the work the building needs and signed a contract agreeing on the cost of the project and the time it will take for completion of the project. Since Mr. Smith is renting a location, he indicates that the work needs to be done in a timely manner and within budget. The contractor indicates that the work will last for about six weeks, and no additional funds will be needed. However; the contractor’s crew starts the work in the building three weeks after the agreed date and after eight weeks later the work is finished only about 50 percent. In addition, the work is of poor quality as well as the materials used. Mr. Smith tried to contact the contractor but failed to receive any answer on the project.
The Term Paper on Analysis Of Australian Building Contracts
The MW-1 2003 Contract was developed and published by the Royal Australian Institute of Architects (RAIA) and the Master Builders Association (MBA). This contract is the revised edition of the original ABIC MW-1 2001 contract AS 4000 1997 General Conditions of Contract The AS 4000 contract was developed through the joint Standards Australia & Standards New Zealand Committee OB/3. The contract ...
Recommendations
Although most businesses would attempt to resolve the conflict in court, it is in the best interest to both parties, due to lack of resources, to find a solution through the alternative method. Based on the cost and time involved into the conflict resolution, both parties would benefit by settling out of court. Both parties would suffer financial loss. Mr. Smith will not be able to open his business on time, and he needs to vacate his current business location. ABC Remodeling Services would earn a negative reputation that would place the future of the business in crisis. The most effective way for businesses to resolve disagreements includes alternative dispute resolution with the use of negotiation, arbitration, and mediation. The best method of resolution for this case would be to negotiate. “Negotiation is a procedure whereby the parties to a legal dispute engage in discussions to try to reach a voluntary settlement of their dispute” (Cheeseman, 2013, p. 52).
In arbitration, the parties are presented with a neutral party, who is called an arbitrator. According to Cheeseman (2013), “labor union agreements, franchise agreements, leases, employment contracts, and other commercial contracts often contain arbitration clauses that require disputes arising out of the contract to be submitted to arbitration” (p. 52).
Mediation is a process in which a mediator assists both parties to reach a mutually acceptable resolution to the dispute. “The mediator is selected by the parties as provided in their agreement or as otherwise agreed by the parties. Unlike an arbitrator, however a mediator does not make a decision or an award” (Cheeseman, 2013, p. 53).
The mediation method provides the most flexibility for both parties because it offers an opportunity to work towards a resolution.
The Business plan on Online Dispute Resolution Critical Mass
Creative processes that solve disputes without turning to litigation have existed for many years. Candidly called "Alternative Dispute Resolution", the three general methods that have emerged and developed in the past two decades are negotiations, mediation and arbitration. More recently a fourth approach is being put to the test, which combines one or all of these forms of ADR with the technology ...
References
Cheeseman, H. R. (2013).
BUSINESS LAW: Legal Environment, Online Commerce, Business Ethics, and International Issues (8th ed.).
Retrieved from The University of Phoenix eBook Collection database.
