How to avoid business disputes

UFC Gym Australia entered voluntary administration last month “after becoming embroiled in a messy $5 million court case with several disgruntled franchisee owners”, according to news.com.au.

What makes this story important is not the specifics of the company or court case but the lesson it teaches: when it comes to business disputes, prevention is better than cure.

With that in mind, here are three key things you can do to keep disputes out of court.

1. Draw up clear contracts

This is the most important thing you can do, because a lot of disputes are the result of misunderstandings. A strong contract – which is a tailored document drawn up by a lawyer, not a one-size-fits-all template downloaded from the internet – will spell out to both parties exactly what their rights and responsibilities are, and dramatically reduce the chance of misunderstandings. And if the other party takes you to court regardless, a strong contract will protect you.

2. Write everything down

A strong contract is a great start – but it’s not the end. When you enter into a business relationship, it’s important to take real-time notes about key conversations and incidents. That way, if memories fade or disagreements occur, you can share this information with the other party, so they understand your position is both correct and legally secure. Again, that will not only reduce the likelihood of legal action but protect you should it occur.

3. Build strong relationships

Where possible, you should try to build strong relationships with your business associates. You don’t have to be best friends; you just need to communicate clearly and respectfully. That will reduce the chance of arguments and will incentivise both parties to search for win-win outcomes.

Adam Zuchowski is a disputes lawyer and principal at Sutton Laurence King Lawyers.

Need expert advice on commercial law in Victoria? Contact Sutton Laurence King Lawyers today on 03 9070 9810 or  for help