FAQs for Small Business Disputes

Small business disputes can arise from a variety of issues, such as breach of contract, employment disputes, intellectual property disputes, and construction disputes. Other common disputes may include issues related to commercial leases, fraud, business torts, and partnership disputes.

There are several options for resolving small business disputes in NJ, including negotiation, mediation, arbitration, and litigation. Negotiation involves informal discussions between the parties to try to reach a mutually agreeable resolution. Mediation involves the use of a neutral third-party mediator who assists the parties in reaching a settlement. Arbitration involves the use of an arbitrator who renders a binding decision after hearing evidence and arguments from both parties. Litigation involves filing a lawsuit in court and allowing a judge or jury to make a final decision.

Small businesses in New Jersey refer to independently owned and operated enterprises that typically have fewer employees and generate lower revenue compared to larger corporations. These businesses can span various industries and sectors, including retail, food services, professional services, technology, healthcare, manufacturing, and more. Small businesses play a vital role in the state’s economy, contributing to job creation, innovation, and local communities. They often embody the entrepreneurial spirit and provide unique products or services tailored to meet the needs of their customers in New Jersey and beyond.

Mediation and arbitration are both alternative dispute resolution methods, but there are some key differences between the two. Mediation is a voluntary process in which a neutral third-party mediator assists the parties in reaching a mutually agreeable resolution. The mediator does not render a decision or make any binding rulings, and the parties can choose to accept or reject any proposed settlement. Arbitration, on the other hand, involves the use of an arbitrator who acts as a private judge and renders a final, binding decision. The arbitrator hears evidence and arguments from both parties and makes a decision that is enforceable in court. Unlike mediation, arbitration is not always voluntary and may be required by a contract or by law.

Alternative dispute resolution methods like mediation and arbitration can have several advantages over litigation. They are typically faster and less expensive than going to court, and they can be more flexible in terms of scheduling and location. Mediation and arbitration are also confidential, which can be beneficial in disputes involving sensitive information or reputational issues. Additionally, alternative dispute resolution methods can allow the parties to preserve their business relationships, which can be important for small businesses that rely on repeat customers or clients.

A breach of contract occurs when one party fails to fulfill their obligations under a contract. For example, if a business agrees to deliver a product by a certain date but fails to do so, they may be in breach of the contract. A business tort, on the other hand, involves a wrongful act committed by one party that causes harm to another party’s business. Examples of business torts may include defamation, fraud, or intentional interference with business relationships.

The statute of limitations is the time limit for filing a lawsuit, and it varies depending on the type of claim. In New Jersey, the statute of limitations for breach of contract claims is generally six years from the date of the breach. For tort claims, the statute of limitations is generally two years from the date of the harm.

If a small business in New Jersey faces a dispute with a customer or supplier, they should review the contract, communicate openly with the other party, seek legal advice from a business attorney, document all relevant information, consider alternative dispute resolution methods, and initiate legal action if necessary. Consulting with an attorney is essential to determine the best course of action based on the specific circumstances of the dispute.