It is common sense that your initial business strategy as a startup will be vastly different than when your company is established and trying to grow further. As your company starts expanding, you may be looking towards bigger opportunities and partnerships to increase your reach or diversify your services.
Transactions and business deals are an important part of growing your business. When looking into partnerships and different types of growth opportunities, it is vital to keep your business relationships healthy. However, sometimes business deals and transactions can fall apart, be disrupted or even turn into a time-consuming conflict.
In this article, we take a closer look at business transaction disputes and what you should keep in mind to avoid and resolve them.
What Is A Business Transaction?
A business transaction refers to any interaction between businesses where one party or both parties fulfill a deal or terms within a contract or agreement. Business transactions can range from leasing office space and purchasing assets to starting a joint venture or selling a business.
More often than not, business transactions require negotiation, consultants and legal advice. For instance, public and private mergers and acquisitions that are completed via takeover bid, amalgamation, plan of arrangement or business combination will call for certain transactions that are complex and unique that an experienced corporate lawyer can help navigate. Transactions on such a corporate level need careful planning.
What Should You Keep In Mind When Negotiating A Business Transaction?
When putting together a business deal, there are a few basic things you should be considering to ensure that the transaction goes successfully.
First, business agreements are needed. They can help hold all parties accountable to deliver and complete all transactions as agreed upon. You should at least have a Letter of Intent or term sheet drafted which contains an outline of the terms of the transaction. These types of documents are good tools which both parties can use to agree upon a dispute resolution method ahead of time. They are also useful as a negotiating tool as the parties create the framework for a potential deal. Another common starting point is a non-disclosure agreement, especially when the two parties operate within the same or similar space.
Second, you should consider having all paperwork reviewed by a lawyer. On your part, it is good to have help when framing and drafting up the terms of your transaction. A corporate lawyer can ensure that the terms are correctly worded and leave no room for misinterpretation. Also, having a lawyer review any terms or agreements can help prevent any misunderstanding and address potential risks that have not yet been considered. Failing to consider even just the clarity in language being used in agreements can lead to a contract dispute.
A business transaction dispute can occur in all types of negotiations and business deals, whether it be establishing a partnership or starting a joint venture. Misunderstandings while in business negotiations can occur for a number of reasons:
- The pricing terms of a deal were not clearly defined
- There was a lack of understanding on the resources needed to complete a transaction (time, money, expertise, employees, etc.)
- A miscommunication between both parties occurs
- Inaccurate or misleading information resulted in financial loss
- Agreement terms are unfair to one party
- The other party fails to follow through
What To Do When You Have A Business Transaction Dispute?
Business transaction disputes are inevitable at one point or another. Being prepared for a dispute could be the difference between effectively resolving the issue or prolonging the conflict.
Before you get into business partnerships with another company, be sure to have a plan of action or a set of options available in order to resolve the disagreement amicably and beneficially for all parties involved.
A few options to resolve a business transaction dispute include:
- Negotiating with the help of third party mediators
- Consulting with industry professionals
- Getting legal advice on what action you can take within the confines of your agreement.
- Initiating legal court proceedings (litigation) if a settlement or solution is not possible
Helping Your Company Deal With Business Transaction Disputes
Our corporate lawyers have experience with a wide range of business transactions and can help you achieve each of the above to ensure that your business is well-protected. Also, you should know your rights and responsibilities as a business owner when it involves business transactions.
If there is a disagreement on expected deliverables for a service or product, we can help redefine or modify transactional goals that are realistic to both parties. We can help you think of possible alternatives to help you strategize your plans, transactions, and alliances
Our lawyers aim to ensure that business deals go smoothly with creative thinking, problem solving and due diligence. They work to make sure that business terms of those transactions are in your favor while being fair and appealing to other parties. Call us for a free consultation.