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Resolving Disputes

Mediation, arbitration and small claims courts are three ways small businesses can resolve disputes without resorting to the expense and time of a lawsuit.

Because an agreement arrived at through mediation does not have to be binding to the disputing parties, it is a more informal process that offers more potential for the parties to work together in the future. Arbitration does result in a legally binding decision; the arbitrator functions like a judge and the proceeding is more like a traditional court case. However, like mediation, it does not involve the time and expense of a court case.

A third option is small claims court. Each state operates its own small claims court and sets its own limit on the dollar amount that can be awarded.