Assuming that you are running a successful business, litigation is all but inevitable. Additionally, there are some times when litigation is unavoidable. However, smart business owners also know that litigation should be a last resort.
Taking a case to court is very expensive and time-consuming. It can be difficult to recover from a long, exhausting trial. Any smart business owner will seek to avoid risk of any sort. Bullish companies often do not last long: building partnerships is always the smarter way. Smart ways to avoid needless litigation include adhering to the “golden rule” and including litigation avoidance provisions in your contracts.
What is the “golden rule?”
Basically, take the time to attempt to envision the situation as your potential adversary sees it. Taking the time to step into the shoes of the other side can help you understand that party’s motivations for conducting themselves in a particular manner. Understanding what motivates the other party to litigate can help you reach an agreeable settlement and avoid litigation in the first place.
This strategy may also incentivize you to improve communications with the other party. Often, talking about the dispute after some careful analysis can provide alternative solutions.
What are litigation avoidance provisions?
Consider these the “prenups” of the business world. Essentially, building in litigation avoidance provisions will contractually force you and the other party to consider alternative avenues outside of litigation should a conflict arise.
Some common litigation avoidance provisions include mandatory mediation or arbitration provisions. They may also include a mutual agreement in advance to allow outside, neutral experts to provide opinions that bind both parties.