Every social group contains within it the elements and conditions in which disputes will arise. Even the smallest social group will experience disputes between its members, and, as we would expect, the larger and more complex a social group becomes, the more varied and, perhaps, frequent will be the disputes which crop up within it. Hardly a day goes by in people's everyday lives without some problem occurring, some argument arising or some resentment or frustration being felt by one person or group over the activities of another. Family rows, arguments with friends, confrontations at work and so on are familiar to most people, as are the various solutions which we use to deal with those disputes.
The simplest disputes are dealt with by various informal, often quite good-natured, means. Within family units, there may be an invocation of an established family custom or rule, or the calling-in of a third party to mediate in the dispute. Rarely would family squabbles result in the initiation of any kind of formal proceedings to settle the matter. Similarly, the social and economic world outside such small units as friends or family rests on various types of relationships between, for example, business enterprises, employers and employees, traders and consumers, and citizens and government agencies. When considering the frequency with which something goes wrong with the smooth running of these relationships, and a dispute arises, it is important to appreciate that the informal resolution of the problem, through concession or compromise, is by far the most usual way of settling the matter.
This mode of settling disputes through concession or compromise is especially important where the parties to the dispute are in some long-standing or permanent relationship with each other. In domestic situations, feuding neighbours will rarely resort to litigation to solve their disputes, partly because theirs is a continuing relationship, as is the relationship between employer and employee, or landlord and tenant. In the sphere of commercial agreements and business contracts, research by Macaulay, among others, has suggested that people in business rarely invoke the law as a means of resolving business disputes over their contractual agreements, mainly because this is seen as having the effect of perpetuating the conflict and polarising the disputants, instead of resolving the particular problem without damaging the continuing business relationships of the parties.