As a business person, you may have had a dispute with your client. It happens due to misunderstandings, failure to make prompt payments or honour contract obligations.

The Australian courts encourage people to settle commercial conflicts through an out-of-court process. The process allows conflicting parties to resolve the issue in private. The article below discusses how you can handle conflict with your clients. 

Negotiation

Negotiation is an instant and cost-effective method to resolve the dispute. The attitude of the two parties will determine the success of the intervention. Approaching the process with a win-win mentality or boiling emotions will only complicate the issue at hand. Preferably, hire a commercial lawyer to represent you during the proceedings. He or she will meet with your client's lawyer to determine the legality of the matter, the terms of the contract and how you can resolve the issue.

Mediation

If parties cannot agree through negotiations, they may ask a neutral third party to help them resolve the issue. The mediator does not make a verdict on the case; however, he or she can guide the two parties during the process. For example, he or she may help them interpret legal terms in the contract.

Arbitration

Arbitration is similar to mediation only that the arbiter (usually a barrister working in commercial law) decides on behalf of the parties. Most people choose to resort to arbitration when negotiation fails.

How to Avoid Conflict

Conflicts are unavoidable; however, you can reduce them by asking a commercial lawyer to draft a contract detailing the services you will provide, how much the client should pay and how you should resolve conflict.

The contract must protect your interests. For instance, a contractor could indicate that he or she should not be held liable for delays caused by poor weather. The agreement should also state what should happen if either party fails to honour their side of the bargain. For instance, the client may have to pay penalties for late payments while the contractor may have to compensate the client if he or she does not meet deadlines. A vital aspect of the contract is termination. For instance, the client can terminate the contract by notifying the contractor and settling all pending payments.  

Ask the client to seek legal advice before signing the contract to ensure he or she understands its terms and conditions. 

Business people can protect themselves from commercial disputes by creating water-tight contracts. A commercial lawyer will help prepare such contracts and represent your interests in case of conflict.