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Why initiating business litigation doesn’t lock you into trial

On Behalf of | Mar 25, 2022 | Business And Commercial Litigation

When another company breaches its contract with your business, you will likely try to resolve the matter outside of court. Some businesses will avoid taking legal action even when the circumstance makes it clear that they should. They want to preserve the working relationship with the other party or worry about making their contract and business dealings public record. 

Especially if you hope to continue cooperating with the other party to the contract, resolving the matter amicably is the ideal outcome. If one or two attempts at casual communication to resolve the matter have not been successful, then it may be time for you to consider filing a civil lawsuit. 

Although you could end up in court, the chances are good that you can resolve the matter outside of court. 

The majority of business lawsuits settle

It is hard to track the exact outcome rates for business lawsuits, but some people estimate that as many as 95% of them settle outside of court. The reason why is simple. Litigation is expensive and can damage the reputation of a company that has failed to fulfill its contractual obligation. Settling outside of court reduces the reputation damage that occurs because of the claim and keeps costs a bit lower. 

Filing a lawsuit could be the only way to recoup your losses, or it could be the only way to motivate the other party to actually resolve the issue. The bigger the impact of a contractual breach on your company, the more important it becomes to enforce those agreements. 

Filing a business lawsuit doesn’t always leave you to court, but it does typically help you push toward an acceptable resolution to the problem.