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How risky is business litigation?

On Behalf of | May 1, 2023 | Business And Commercial Law

Like other entrepreneurs, you know exactly how to make money by selling a product or service to customers. Business-related legal matters are not exactly in your wheelhouse, though. For that reason, you devoted a significant amount of time, money and energy to drafting comprehensive foundational documents.

If you have a disagreement with business partners, shareholders, vendors or someone else, your agreements might have a framework for resolving it. On the other hand, it may be necessary to litigate your dispute in a court of law. Doing so can be risky, however.

Potentially expensive legal bills

Business litigation quickly can become prohibitively expensive. If your business is not flush with cash, you might run out of money before you resolve your dispute. To save money, it might be worthwhile to consider alternative dispute resolution. According to Harvard University, ADR is almost always less expensive than traditional litigation.

A lack of control

Even if you believe you are in the right, it can be difficult to convince a judge or jury. After all, the individual or entity you are battling in court also has an opportunity to make legal and factual arguments. Simply put, because it can be difficult to predict the outcome, business litigation can come with a lack of control.

Even though business litigation certainly has its risks, it sometimes is the most effective way to resolve disputes. Ultimately, though, before you decide to take your disagreement into the courtroom, you should carefully scrutinize and plan for each risk your business might encounter.

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