When you're hit with a lawsuit, the costs can be mind-boggling-even if you win. That's why more and more small businesses are using alternative dispute resolution (ADR), a concept that includes mediation, arbitration and other ways of resolving disputes without resorting to litigation. Both in contracts between businesses or in agreements between employers and employees, people are consenting ahead of time to submit future disputes to ADR.

Excerpted from Start Your Own Business, 2nd edition: The Only Start-Up Guide You'll Ever Need