Business relationships depend on contracts, performance, trust, and clear expectations. When one of those elements breaks down, a disagreement can quickly become a dispute. Business-to-business disputes may concern financial obligations, vendor performance, ownership and intellectual property rights, competitive practices, or other industry-specific challenges. Understanding how these conflicts commonly present can help businesses better manage risk and choose the right path toward resolution.
Types of Business-to-Business Disputes
Contract / Payment Disputes
Disputes between businesses over alleged contract breaches are some of the most common commercial disputes. Typically, these disputes arise when one party fails to pay the invoiced or agreed-upon amount. Commercial contract disputes can also arise over failure to provide the product or service as outlined in the contract. For example, one party may claim that goods or services were delivered late, were incomplete, or did not meet the specifications set out in the agreement. These disputes often become more complex when the contract's terms are unclear or the parties disagree about whether the obligations were met.
Vendor or Supplier Disputes
Vendor or supplier disputes often arise when problems develop in the delivery of goods, materials, or services. These conflicts may involve defective products, supply shortages, service interruptions, or unexpected changes in pricing or quality standards. For the company receiving the goods or services, vendor issues can create business disruptions, added expenses, missed deadlines, or problems serving customers. Whether it’s a small business or a large corporation, vendor disputes are among the most common issues that arise in commercial relationships.
Ownership, Shareholder, and Governance Disputes
Ownership, shareholder, and governance disputes can arise when business owners, shareholders, board members, or other stakeholders disagree over how an organization is controlled or financed. These disputes may involve questions around ownership interests, voting rights, board authority, shareholder protections, or executive decision-making. Common issues include allegations of mismanagement, breach of fiduciary duty, or exclusion from key business decisions.
Business “Divorce” or Break-Up Disputes
A business “divorce” dispute arises when conflicts among business owners, partners, shareholders, or LLC members become so significant that continuing to operate together is no longer practical. These disputes typically involve questions of control of the company, ownership rights, profit distributions, management authority, fiduciary duties, business valuation, and the company's future. Business divorces can threaten business continuity, employee stability, customer relationships, and enterprise value. Like a marital divorce, resolution of the dispute often requires untangling shared assets, rights, obligations, and decision-making authority while seeking to preserve as much business value as possible.
Merger & Acquisition, Joint Venture, & Financing Disputes
Mergers and acquisitions or joint venture partnerships can lead to disputes between the parties involved. Disputes can also arise from financing arrangements in which a party claims that another failed to comply with the terms of a financing agreement. These disputes are often complex, involving substantial financial stakes and multiple parties with competing business interests. They may arise during a transaction or deal or after a business arrangement has been completed. In many cases, one party alleges that the other failed to disclose material information or did not fulfill its contractual obligations.
Business Torts / Unfair Competition Disputes
Business torts arise when one company claims another company’s actions caused economic or reputational harm. Examples include allegations that a business engaged in misrepresentation or defamation, mishandled trade secrets, or otherwise profited from disparaging or unfairly targeting another business. The actions at the heart of the dispute may have directly targeted a business’ source of revenue. They may also involve allegations of deceptive practices used to steal market share or intent to cause reputational harm, such as by spreading allegedly malicious information. Commercial dispute resolution processes, such as arbitration, can provide a structured framework to resolve these complex matters.
Intellectual Property Disputes
Intellectual property disputes arise when a party claims unauthorized use of a patented, licensed, copyrighted, or trademarked idea, product, or work. These disputes can involve issues such as infringement, ownership rights, licensing terms, or royalty payments.
Confidentiality Disputes
Confidentiality disputes involve the alleged disclosure or misuse of confidential information and often concern alleged breaches of non-disclosure agreements (NDAs) or improper disclosure of trade secrets. These disputes may involve former business partners, employees, or vendors.
Industry-Specific Disputes
Some disputes arise from industry-specific issues, practices, or regulatory requirements. In the financial industry, disputes may arise over securities trading or investment fraud, issues related to portfolio and risk management, or claims related to a public offering or IPO. In the healthcare industry, complex payor-provider disputes may involve disagreements over billing practices, reimbursements, or service agreement terms. In the technology industry, disputes may arise from the use, development, or implementation of software systems. Disputes may involve complex, technical subjects, such as robotic automation of retail or manufacturing establishments, blockchain, artificial intelligence, and other emerging technologies.
Additional industries where complex, niche disputes tend to arise include transportation, professional sports, and life sciences and biotechnology. Industries that involve specialized or technical knowledge often benefit from a dispute resolution framework and a decision-maker with experience in that field.
Commercial Dispute Resolution
To resolve conflicts, businesses normally first negotiate informally to see if they can address and resolve their concerns without involving third parties. If negotiation proves unsuccessful, alternative dispute resolution (ADR) methods such as arbitration or mediation are a popular next step towards resolution. Mediation involves working with a neutral third party who facilitates the parties’ discussions and helps them work toward a mutually agreed upon resolution. When parties prefer a more formal and final process, arbitration allows them to present their case to a neutral arbitrator, who oversees the proceedings and issues a binding decision.
Why Businesses Choose Arbitration and Mediation to Resolve Disputes
When a dispute arises between businesses, ADR methods like arbitration or mediation can be preferable to traditional litigation. Arbitration provides a fair and efficient framework for resolving business dispute cases that’s private and often less costly than going to court. Mediation provides a confidential process for resolving disputes in a collaborative and less adversarial manner.
ADR often allows businesses to preserve working relationships and can be an effective choice to resolve conflicts between businesses that may still need to work together for years to come. For disputes involving highly technical industries or specialized subject matter, ADR can provide an effective forum for resolution because parties often are able to choose an arbitrator or mediator with relevant industry, technical, or legal expertise.
ADR providers, such as the American Arbitration Association® (AAA®), offer access to a large roster of panelists with experience across a wide range of industries. Businesses seeking resolution of their commercial disputes often choose the AAA for access to neutrals who understand the technical nuances of their industry. The AAA is well-equipped to handle complex B2B disputes and provides the administrative experience and industry knowledge needed to guide parties toward efficient and fair resolution.