If you are running a successful business, lawsuits of some sort are unavoidable. In some situations, litigation is a necessary means to solve disputes. However, laying proper groundwork can help you avoid litigation, which will save you time and money.
Litigation not only takes up time, but it will distract you and potentially many of your colleagues. Overall, it hurts company productivity. Fortunately, you can take measures to avoid litigation before it even starts. You should abide by the golden rule and consider incorporating litigation avoidance provisions in your contracts.
Treat all parties like gold
Even if a third party makes allegations that distress you, make sure that you take the time to objectively analyze the situation. If you can see the situation from the shoes of the other party, it may help improve communication and assist in finding a common ground to solve the dispute before litigation is necessary.
Good communication is key. In many cases, litigation occurs because one party is not even willing to talk with the other or consider their concerns. Clear and open lines of communication can stop litigation.
Litigation avoidance provisions
From the contractual side, there are many instruments you can use to avoid litigation. For instance, making use of cure provisions, arbitration provisions and requiring a partnered approach to communication can be very powerful. You can also involve risk-shifting avoidance provisions, like waiver language, exculpatory agreements, and hold harmless provisions. These can give you a clear roadmap when navigating disagreements.
Litigation is a part of business life, but it is also possible to lower your risk. Creating solid partnership foundations and providing clear contractional language are key.