Should you go to court or try to settle your business dispute?

Should you go to court or try to settle your business dispute?

On Behalf of | Feb 2, 2021 | Business Law |

Business disputes come in all shapes and sizes. You could be the one initiating the claim or defending against someone else’s spurious claims. Maybe a former employee just tried to open a competing business in clear violation of their contract with you.

Perhaps a supplier provided you with tainted chemicals and won’t refund your payment or provide replacement materials. You could have hired a construction company to install machinery at your facility, only to have them fail to arrive after cashing your deposit check. It’s even possible that a person or business has accused you of harming them or breaking a contract.

Business disputes often require that the party with a complaint take legal action. Once you file a civil lawsuit, the other party might then approach you with a request to negotiate a settlement. Is it a better option to go to court or to settle outside of the courtroom?

For many companies, settlement is a cost-effective solution

When you find yourself embroiled in a business dispute, going to court can cost a lot of money. The expenses involved in litigation can make settlement the most cost-effective solution for a business facing a breach of contract or employment dispute.

A settlement gives you an opportunity to keep costs low while also retaining control over the outcome. Even if you can’t resolve things quickly in direct negotiations, alternative dispute resolution systems could help. Mediation and arbitration can help people find some kind of compromise without going to court. As long as you settle things outside of court, the agreement you reach will be private as well, which can be important in some situations.

Sometimes, litigation is the better solution

Mediation and similar collaborative approaches to business disputes only work when both parties willingly compromise.

If the other party refuses to assume any sort of fault or expense associated with the dispute, you may not be able to reach a settlement outside of court. Additionally, if the other party has shown that they will make promises they have no intention of following through with, a compromise and agreement reached in mediation may not offer you much peace of mind.

A court order has a lot more force behind it than a contract or mediation agreement. A judge can also rule in a way that doesn’t require your company to make any concessions in the matter. You will have to carefully review the situation to decide if a settlement or litigation is the better approach.