Contention -- arguing or competing with someone or something else -- may seem an inevitable part of life to some. Differing values and differing goals and scarce resources make contention a common occurrence, right?

Taoists would say no. The idea that resources are scarce is viewed as either an illusion created by fear or perhaps a temporary circumstance. There is more than enough food, land, shelter, and companionship for everyone really. The earth is really a bountiful place despite what droughts, disasters, wars, isolation, and overpopulation might make us think. And there is at the very least the possibility of avoiding those with contrary values or goals, if not the possibility of compromise. What makes us think we cannot avoid contention is that we have such a limited view of our options -- for instance, is this the only job or romantic partner you could have in your life? Your last chance forever and ever? What makes us incapable of compromise is most often our own inability to be humble or to respect the needs of others.

Lao Tzu (Laozi) makes a bold statement about non-contention in the Tao Te Ching (Dao De Jing):

TAO
MANOR
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"Because [the sage] is not contentious,
Hence no one under heaven can contend with him."

-- from chapter 22, E. Chen (tr.)
Perhaps you think there are situations in which someone is bent on contending with you and refuses to either compromise or let you leave. Such was the situation in which a master swordsman found himself in the following Zen parable:

The master swordsman was teaching his students when a younger swordsman from another kingdom challenged him to a duel. The master's code of ethics and the fact that he was surrounded by his students made it impossible for him to decline the challenge or suggest some less deadly competition as a compromise. One of his students warned the master swordsman, "I have heard of this man. He has never been beaten in battle because of his ability to consistently find his opponent's weakness and exploit it to victory." The challenger, seeing the master swordsman too accomplished and too balanced to easily expose a weak point decided to use the master's onlooking students as a weapon. He hurled insults and curses at the master swordsman for a long time, hoping to unbalance the older man by angering him in front of his pupils. But the master swordsman just stood there unmoving, his hand resting comfortably on the hilt of his sword. After a half-hour, the challenger gave up and left without a fight. The master's students questioned why he had not responded when he had been degraded and disrespected so greatly. "Ah," said the master swordsman, "if someone offers you a gift and you do not receive it, to whom does the gift belong?"

Contention requires two people's participation. This does not mean that if someone threatens your life or something else you hold dear that you do nothing to defend yourself, but if we reduce our attachments to things, you leave fewer opportunities for anyone to threaten you. We can also make ourselves less open to contention when we have little that anyone wants or that threatens anyone. We can be humble and seek the lower places as water does. As Lao Tzu puts it:

"A person with superior goodness is like water,
Water is good in benefiting all beings,
Without contending with any.
Situated in places shunned by many others,
Thereby it is near Tao."

-- from chapter 8, Tao Te Ching, E. Chen (tr.)
Non-contention