Business Law Ch. 4 Notes.docx

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

Business Law Ch. 4 Notes Chapter 4 Resolving Disputes through Negotiation  Clarification of the situation o First step is to investigate the situation to determine the nature and extent of the dispute o The objective is to resolve the matter as quickly as is reasonably possible o Negotiation: a process of deliberation and discussion used to reach a mutually acceptable resolution to a dispute  Reach a fair and acceptable outcome without having to activate more formal processes  The process of negotiation is not governed by technical rules  The overwhelming majority of disputes are resolved through negotiation  The Negotiation Process o Whether the negotiations will succeed will depend on:  The willingness of the parties to compromise and negotiate in good faith  The nature and significance of the dispute  The priority the parties give to its resolution  The effectiveness of those involved in the negotiations Alternative Dispute Resolution  Alternative dispute resolution (ADR): a range of options for resolving disputes as an alternative to litigation  Most common forms are mediation and arbitration o Both involve a person who is independent of the parties and who has expertise in resolving disputes o Mediator: a person who helps the parties to a dispute reach a compromise  Normally refrains from evaluating positions or in any way judging the parties o Arbitrator: a person who listens to both sides of a dispute and makes a ruling that is usually binding on the parties  Role is more formal; definite ruling after submission of the parties  Binding: final and enforceable in the courts  Cannot be appealed o Mediators and arbitrators are often lawyers or retired judges, but anyone is legible to become a full or part time practitioner  ADR is likely to be successful when: o The parties are interested in considering each other’s position with the goal of achieving a compromise and settling the dispute o The parties with to maintain their commercial relationship o The parties need a quick resolution o The dispute is complicated so litigation would be expensive o The dispute involves sensitive or emotionally charged issues that the parties want to keep private  ADR has worked effectively in these types of legal disputes: o Commercial or contract matters o Personal injuries o Employment matters o Environmental matters o Trade matters o Intellectual property o Professional/client matters o Partnerships o Real estate o Franchising  If parties do not agree in advance on ADR, they can do so at any later time  As litigation looms or progresses, the incentive to agree on an alternative process becomes greater  If none of the ADR possibilities results in resolution of the dispute, then litigation is the remaining option The Litigation Process  Litigation should not be undertaken without an understanding of its potentially adverse consequences o Slow system o Harm commercial relationships o No guarantee of success o Significant investment of money, time, and commitment  Commercial litigation arises when one business makes a deliberate decision to take legal action against another  The legal foundation and outcome of the claim are governed by the legal rules contained in relevant common law and statute law  Class action: a lawsuit launched by one person who represents a larger group whose members have similar claims against the same defendant  Limitation periods: the time period specified by legislation for commencing legal action o Vary widely depending on the nature of the lawsuit o E.g. to sue for breach of
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