Litigation: Overview, definition and example
What is litigation?
Litigation is the process of resolving disputes through the court system. It typically begins when one party files a lawsuit against another, seeking a legal remedy such as monetary compensation, specific action, or enforcement of an agreement. Litigation often involves lawyers, evidence, court hearings, and possibly a trial.
For example, if a business sues a supplier for failing to deliver goods as promised, that legal process is considered litigation.
Why is litigation important?
Litigation is important because it provides a formal way to resolve disputes and enforce legal rights when other methods, like negotiation or mediation, fail. It ensures that both parties have an opportunity to present their case before an impartial judge or jury.
In business, litigation can protect companies from unfair practices or breaches of contract, but it’s also time-consuming and expensive. Understanding litigation helps businesses evaluate whether going to court is the best option or if alternative dispute resolution methods might work better.
Understanding litigation through an example
Imagine a company hires a contractor to complete a major renovation project, but the contractor doesn’t finish the work on time or meet the agreed standards. The company files a lawsuit (litigation) to recover the costs of fixing the issues and delays caused by the contractor.
In another example, two businesses dispute the ownership of a patent. One company files for litigation to ask the court to decide who has the rightful claim to the patent and to stop the other company from using it.
An example of a litigation clause
Here’s how a litigation clause might look in a contract:
“In the event of a dispute arising under this Agreement, the Parties agree that such dispute shall be resolved through litigation in the courts of [jurisdiction], and each Party consents to the exclusive jurisdiction of such courts.”
Conclusion
Litigation is the formal process of resolving disputes through the court system, often used as a last resort when negotiations or other methods fail. While it ensures fairness and legal enforcement, it can also be costly and time-consuming.
Understanding litigation helps businesses decide when it’s necessary to go to court and when alternative solutions might be more practical. It’s a key tool for protecting rights and resolving conflicts in a structured, lawful manner.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.