Don’t Let Disputes Derail You – How to Handle Business Disagreements Effectively

Your Legal Team
Sep 15
4 min read

In business, disagreements are inevitable — whether with clients, suppliers, partners, or even within your own team. But a dispute doesn’t have to become a disaster.

Handled well, you can protect your reputation, avoid legal costs, and preserve (or end) relationships on your terms. Handled badly, disputes can cost you thousands, drain your time and energy, and distract you from your goals.

At Your Legal Team, we help SMEs and founders deal with conflict constructively — before it spirals. Here’s our practical guide to resolving disputes effectively in business.

Common Types of Business Disputes

Business disagreements take many forms, including:

• 💼 Contract disputes (e.g. missed deadlines, unpaid invoices, poor service)

• 🤝 Partnership fallouts (especially if there’s no clear agreement)

• 🚫 Supplier or service failures

• 💰 Non-payment or late payment

• ✍️ Disputes over terms and conditions

• 👥 Employment and HR issues

• 📦 Intellectual property use and copying

• 🏗️ Construction or development delays

These can all be resolved without going near a court — especially if you act early.

Step 1: Understand the Root of the Issue

It’s easy to react emotionally when things go wrong — but your first job is to step back and assess objectively.

• What exactly has gone wrong?

• What was agreed, either in writing, or verbally?

• Is there a breach of contract or just a misunderstanding?

• What evidence do you have?

• What would a fair resolution look like?

If you’re dealing with a difficult person, separate the issue from the personality. Focus on the facts and outcomes.

Step 2: Check the Contract, If There Is One

Most disputes revolve around what was, or wasn’t, agreed. So check:

• Written contracts or agreements

• Terms and conditions

• Emails and messages

• Quotes or invoices

• Policies and procedures

Even if the agreement was informal, evidence like email chains or payment receipts can help you establish your position.

If there’s no contract in place, don’t panic — the law still offers protection, particularly under consumer law, the Supply of Goods and Services Act, or common law principles.

Step 3: Try to Resolve Things Directly

If it’s safe and appropriate to do so, try resolving the issue with a polite, professional conversation or written message.

• Stay calm and factual

• Avoid blame or emotional language

• Suggest a reasonable solution

• Keep a written record of all communications

Sometimes people genuinely don’t realise there’s a problem — or they’ll be open to resolution when you approach it clearly.

Step 4: Send a Formal Letter (With Legal Weight)

If informal approaches don’t work, the next step is a formal letter before claim. This is a structured letter that:

• Sets out your position

• States what’s gone wrong

• Explains the legal basis of your claim

• Gives the other party a clear deadline to respond or resolve it

• Warns that legal action may follow if they don’t

This often prompts the other side to take things seriously — and settle without court involvement.

We write these letters for clients frequently, and they’re often enough to resolve disputes quickly.

Step 5: Consider Alternative Dispute Resolution like Mediation

Going to court should always be a last resort.

Mediation, often with a legal representative present, can lead to fast, practical outcomes — with far less stress and cost than litigation.

Benefits of mediation:

• Flexible and confidential

• Preserves relationships (if that’s important)

• Cheaper than court

• You stay in control of the outcome

• Often resolves matters in a day

Some industries (like construction) even have specialist ADR bodies.

We are able to assist parties’ in the process of mediation, and even have a qualified mediator, who can assist you with resolving a dispute, provided we haven’t assisted one of the parties before.

Step 6: Court Proceedings

If resolution isn’t possible, court action may be required — but it doesn’t always mean a trial.

For example, if you’re owed money:

You can issue a Small Claim (under £10,000) online relatively simply
Many cases settle before the hearing
A court judgment can help you enforce payment through bailiffs or deductions from earnings

Other types of claims, like breach of contract, defamation, or employment disputes, may require more formal legal proceedings.

If we are acting as your company secretary, or in-house legal department, we can deal with small claims for you - it’s much faster and easier if you’ve done it plenty of times before. For more complex cases, we can refer you to appropriate solicitors and barristers.

How to Prevent Future Disputes

Prevention is better than cure. Here’s how to avoid problems down the line:

✅ Use written contracts every time, and make sure they’re clear

✅ Set expectations clearly from the start

✅ Keep written records of key discussions and changes

✅ Deal with problems early — silence makes things worse

✅ Use terms and conditions that protect you

✅ Get advice before signing anything important

Solid paperwork and clear communication are your best defence.

We Can Help

At Your Legal Team, we specialise in helping business owners:

• Resolve disputes efficiently and affordably