Ways to Resolve Contract Disputes Out of Court

Contracts are an excellent way to secure quality work, but they can also become a fast-track to a costly court battle. All too many business owners find themselves in these nightmarish scenarios every day, but managers are finding ways to resolve these conflicts out of court. Here are a few things you need to know that could save you a major headache while protect6ing your brand’s reputation. 

Why Settling Out of Court Matters

Corporations in the United States pay roughly $20 billion a year in litigation on business lawyers alone. Add in diverting vital employees from productive activities and the cost of damaged relations from the dispute, alongside other court fees, and it’s easy to see how a court battle comes with a severe financial impact on any business. 

There’s also the impact a contract dispute can have on your brand. Regardless of the trial’s outcome, news of your company possibly breaking the agreements within a contract will spread. This can hurt your brand’s reputation in the public eye while also making potential future contractors think twice about working with you. So, here’s how you can settle outside of the courtroom. 


One of the best ways to maintain relationships with contractors and keep your brand’s reputation from being dragged through the mud is mediation. You and the contracted party must agree to meet with an unbiased third-party, often a lawyer or attorney, who is skilled in negotiation techniques. 

Both sides get the chance to explain their side of the conflict, then the mediator tries to find common ground where a resolution is possible. Keep in mind, however, that both parties must agree to any resolutions for this path to work. 

During the process, both parties are likely to bring their own lawyers along. This ensures that the final resolution is favorable for everyone, but also stands to add fuel for a potential court date if things fall apart. It’s in your best interest to compromise here, so long as you aren’t just giving in to unreasonable demands. 


Much like mediation, you’ll both sit across the table with your lawyers while a third-party listens to each side. Unlike mediation, the resolution an arbitrator decides on is a legally binding agreement. In some cases, a panel of arbitrators makes this decision. 

Arbitration is a much faster process than mediation, simply because there’s less discussion on what each side will settle on and more of a focus on the third-party telling the others what the outcome will be. While both parties often have the right to appeal a decision, many rulings are final. 

Collaborative Law

This route is available if you and the contracted party have agreed to set the courtroom aside. Both parties and their respective lawyers, like these Orange County copyright attorneys, meet for a series of negotiations. 

During the negotiations, parties agree upon rules that end up acting as a reduced settlement agreement. Everything is confidential during the process, protecting your brand along the way. While agreeing on the settlement, you also have the opportunity to maintain or restore your working relationship with the contractor, making this an ideal choice. 


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