Business Law Chapters 4 & 28.docx

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Western University
Management and Organizational Studies
Management and Organizational Studies 2275A/B
Philip King

Business Law Chapters 4 & 28 Chapter 4: Dispute Resolution Business Law in Practice The Motor Vehicle Accident delivery truck collision - Report incident and possible injuries to insurer - If properly covered; insurance will deal with damage to vehicles and legal claims made by the injured parties - Must provide insurer with immediate complete and accurate info - If insurance thinks injured parties are looking for more compensation than needed; it may resist payment - Insurance premiums will probably increase - Minimal involvement of legal system as long as insurance company pays the claim The Bylaw Change changed bylaw for waste disposal; environmental handling fee imposed on electronic equipment at purchase; electronic waste banned from landfills - Could contact municipality prior to the change of the bylaw - Little change of successfully challenging the bylaw in court - Could consider asking for an amendment or exception - Little possibility that a legal dispute will arise from this matter - Disposing of customers old office supplies will have an extra cost now; they could stop accepting it and risk customer dissatisfaction - May have to pass environmental fees to customers with increased prices The Delinquent Customer Failed to pay account due to financial difficulty - May indicate failure in credit procedures - Can either; give opportunity to recover; accept less than full amount; write of debt; or take steps to be paid (selling debt to collection agency, suing, or filing a claim) - If debt is not large it is wise to avoid legal dispute The Dissatisfied Customer not paying account b/c they feel service is inadequate - Customer may claim compensation - Long term relationship is in jeopardy - Look at contract to determine liability - May have commercial liability insurance (must immediately notify) - Is a legal dispute (refusing to pay and criticizing the goods and services) The Damaged Goods shipment is damaged; supplier not taking responsibility - Cannot be sold (unless discounted) - Review contract - May develop into legal dispute The Problem Employee - Internal matter - Risk management plan would specify consequences - Legal dispute if employee is fired with no termination pay Resolving Disputes through Negotiation Clarification of the Situation - Determine nature and extent - Contact both sides - Set priorities - Determine when legal advice is required - Objective is to resolve as quickly as possible - Relationships not be seriously harmed - Informal and inexpensive - Not governed by technical rules - Preferable to judges resolution - Majority of disputes solved through negotiation - If insured must allow insurer to conduct negotiations The Negotiation Process - Success depends on: 1. Willingness of parties to compromise 2. Nature and significance of dispute 3. Priority given to resolution 4. Effectiveness of those involved - Parties choose their own negotiators (employees lawyers etc.) When Negotiations Fail - No party is prepared to compromise further - Choose to concede and cut losses or risk the expenditure of more money and time - Look at what is in the best interests of the organization long term To Proceed or not to Proceed with a Legal Dispute - What steps are available? How long will they take? - Can the business devote the resources necessary? - Will it affect the reputation? - Is the relationship with the other side valuable? - Will the relationship be harmed? - Likely cost? - Does the other side have assets to pay the claim? Alternative Dispute Resolution Mediation - Mediator helps parties to reach their own compromise - Helps clarify the other point of view - Refrains from evaluating, judging, or deciding the outcome Arbitration - Arbitrator is more formal - Hears both sides - Makes definite ruling after considering both submissions - Ruling is binding (means that the decision is final and can be enforced in the court) - Often arbitration results from a term in the contract No mandatory qualifications for ADR practitioners ADR is popular for international disputed because there is not international legal system/courts Suitability of ADR is affected by the nature of the relationship between the parties and the circumstances Likely to be successful if: - Interested in achieving compromise - Wish to maintain commercial relationship - Quick resolution in ongoing transaction - Dispute is complicated (would be expensive) - If It is a private matter ADR Sources - When dispute resolution is included in contract - Can agree on ADR at any time - Can be used for customers to submit and resolve complaints Does n
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