Business must move ahead. Companies cannot put earnings on the back burner for disputes, hence the vitality of comprehensive governing documents.
Consider a joint venture. Partnering with another entity can expand your target market, increase your profit potential and generate new product offerings. However, you must enter into agreements carefully to minimize potential downfalls.
How and when should we agree to disagree?
As you establish your operating agreements with another entity, you must consider the unfortunate realization: this may not work. Risk mitigation begins with addressing a potential deadlock from the start.
Although you probably agree failing isn’t an option, prioritizing your interests is part of the process. Do you know how you’d rather approach a devastating dispute if one interferes with your collaboration?
Escalate and mediate
Remember that mediation may be key while specifying how you’ll attempt potential dispute resolution. As you draft your escalation and mediation provisions, include factors such as:
- The types of issues to which these terms apply
- Whether a mediation process should consist of a panel or an individual
- The maximum timeframe a particular matter will remain in mediation before taking other measures
Also, think about the credentials required for another party to intervene in various disputes.
The next steps
Designating a formal deadlock resolution process may foreshadow a more significant legal battle. However, a comprehensive risk mitigation strategy is integral to protecting your interests.
Considering the investment and sacrifice invested into your business, why wouldn’t you do everything possible to maximize success?