Management and Organizational Studies 2275A/B Chapter Notes - Chapter 4: Alternative Dispute Resolution, Counterclaim, Jury Trial

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Paul Dimovski
Business Law
Readings – Ch. 4 Textbook
Dispute Resolution
Introduction
It is not in the best interest of a business to void all legal conflict at all costs
Manage such disputes with the express goals of:
oAvoiding time-consuming and expensive litigation
oPreserving desirable long-term commercial relationships
Business Activities and Legal Disputes
Business operations – both internal and external- involve numerous interactions that
have potential legal consequences
The Delinquent Customer
oThe customer’s refusal to pay its account may indicate that Northland has failed
in its procedures for extending credit
oDecide if it should: give the customer an opportunity to recover financially
before demanding payment; offer to accept less than the full amount; write off
the debt altogether; or take steps to be paid on its account
oSetting guidelines for granting credit to customers does not guarantee that every
debt will be collectable
oNo legal dispute will arise from this event
The Hacking Attempt
oThe incident does highlight that hacking incidents can potentially be quite costly
oIncur extra expense associated with the recovery of data, liability for the loss of
sensitive customer and employee data, and a loss of revenue resulting from an
interruption of the computer system
oUnlikely to result in a legal dispute
The Pollution Incident
oMust report the pollution incident to the relevant environmental regulatory
agency. The agency may impose a fine, clean-up order, or some other
administrative penalty depending on the nature, cause, and severity of the
incident.
oUnlikely to result in a legal dispute
oMust also report the incident to its insurer
oNorthland has insurance in place to cover the damage to the farmer, this
incident may result in a legal dispute
oThis natter is a legal dispute, since the farmer is refusing to accept compensation
and this is threatening to contact the media and environmental protection
groups
The Equipment Breakdown
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Paul Dimovski
oAlthough machine breakdown and resulting loss of profit was anticipated and
managed by the purchase of insurance, this incident will result in a legal dispute.
The amount of money involved is simply too large
oManaging disputes does not mean simply proceeding to court
oThe most common are negotiation, mediation, and arbitration
oAlternative Dispute Resolution (ADR)
A range of options for resolving disputes as an alternative to litigation
Alternative Dispute Resolution
Negotiation
oNegotiation is problem-solving process in which parties discuss their differences
and attempt to reach a mutually agreeable resolution. It is the most common
alternative dispute resolution method because it is cost effective, is usually
quick, and allows parties to craft a solution that is suitable for their particular
situation as opposed to having another party, such as a judge, impose a
resolution
oWhen to Negotiate
Negotiation can be used to resolve virtually any type of dispute
A provision in a contract may require the parties to attempt negotiation
When negotiation is used, it can be employed at any stage of a dispute,
even on the eve of or midway through a trail
oHow to Negotiate
Some cases it may be preferable to hire a lawyer, advocate, or counselor
who has the expertise to help in the negotiations
First step is to investigate the situation to determine the nature and
extent of the dispute
In can operate in whatever way the parties wish to solve their problem
Important to get the negotiations off on the right foot
Where negotiations do succeed will depend on a number of factors,
including the following:
The willingness of the parties to compromise and negotiate in
good faith
The nature and significance of the dispute
The priority the parties given to its resolution
The effectiveness of those involved in the negotiations
Release: An agreement where a party agrees to relinquish past, present,
and future claims arising from a certain even.
Common to have a confidentiality clause as part of the settle or release
A release is binding on the parties unless it is grossly unfair or
unconscionable
oWhen Negotiations End
Majority of cases, parties reach settlement, Other times, an impasse is
reached where neither party is prepared to compromise further
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