6 Top Ways to Settle a Commercial Litigation: A Legal Guide for Entrepreneurs.

6 Top Ways to Settle a Commercial Litigation for Entrepreneurs

Business and partnerships can turn sour at any moment due to breaching of contract (known as broken or failed promises). And this may lead to commercial litigation or contract agreement dispute. In this article, let us understand the 6 ways to settle a commercial litigation.

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With the current economic hardships and the future’s uncertainty, many entrepreneurs are bemoaning their unsecured debts. To settle their debt, they have to go through litigation and wage legal battles. In this post, we will talk about ways to resolve commercial litigation. We will focus on what commercial litigation is and how it can be settled with lawyers’ help. We will also discuss how one could identify a suitable lawyer who can assist in determining commercial litigation.

What Is A Commercial Litigation?

Commercial litigation is the legal recourse taken by one company against another. Wherein a trial is had and judgment is rendered in favor of the winning party. Partnerships in businesses generally involve promises to deliver service or product in exchange for money or similar considerations. When either party fails to keep the promise, the other may enforce the agreement or contract by filling a civil lawsuit.

To this day, commercial litigation remains the primary method of resolving high-value and complex disputes in the UAE.

Top 6 ways to settle a commercial litigation
Commercial litigation remains the primary method of resolving high-value and complex disputes in the UAE.

Key Issues to consider before bringing an action for commercial litigation

A party seeking legal action must consider the following circumstances: 

a. Economic viability of the defendant,

b.Likelihood of the defendant to abscond or flee.

The party may file a precautionary attachment application in court to ensure that assets will not be dispersed or dissolved by the defendant.

What are the ways to settle commercial litigation?
  1. Go Through The Terms Carefully

Before signing any contract, you should always read it carefully. And in case of any dispute, go through the agreement again, and this time more carefully. Pay your attention at specific clauses or sections that describe anything about –

  • It is related to your dispute. And if you and your contractor have fulfilled the obligations.
  • The procedures that you need to follow in such a situation or while resolving your dispute.
  • Termination clause that might tell you how to end this contractual relationship should you decide to do so.

2.  Negotiation

It is always better that you negotiate terms with your contractor before planning to take legal action. You need to point out the specific areas where you think that contractor has done wrong and give a chance to respond. Many of the disputes are mere because of miscommunication and misunderstanding. Discuss with the contractor about the remedy actions that need to be taken to normalize the situation and see what he responds.

You can also formalize the negotiations by introducing attorneys on both sides. It is the fundamental way of settling differences. It is a back-and-forth communication with the mere goal of finding a solution for the dispute.

There is no specific procedure or rules for the subsequent negotiation. Any party can decide and initiate a negotiation in a calm manner. Negotiation is initiated at any stage: i.e., before filing a lawsuit, while a case is in process, at the trial, or before or after the appeal is filed.

3. Contact State And Local Agencies

Many state contractor agencies or similar trade groups have resolution programs for general disputes involving contractors. They may be a little biased towards the contractor, but they surely will be interested in any disputes concerning any of their members. After all, reputations are essential for business. Moreover, if you find help and resolve the conflict, it would surely cut off your costs.

4. Mediation

Mediation is nothing but a more legalized and structured form of negotiation. It is overseen by the third-party or independent person called a mediator. This is the next step if you fail to reach an agreement. A mediator helps identify issues from both parties, as it has a fresh view of the dispute. This may help in resolving the matter and coming to a satisfactory agreement. The mediator is generally a judge or a senior attorney.

This step helps by making both the parties see each other’s point of view. It is a non-binding process; it can only be bind when parties agree mutually and put terms in writing, and signs it.

Kinds of disputes where mediation can be most useful are –

  • Tenants and landlords
  • Family disputes like child custody or divorce
  • Business disputes
  • Probate issues
  • Employees and employers
  • Merchants and consumers

5. Arbitration

The next stage of mediation. In mediation, the control is in both the parties’ hands, but in arbitration, the power goes to the third party as an impartial one to take final decisions.

Arbitration, along with negotiation and mediation, are parts of the alternative dispute resolution (ADR) process. This step is typically involved in such situations wherein the ability of parties to negotiate has been exhausted.

Usually contracts include arbitration clauses, especially in applications for a stock-broker account, retirement account, or credit card. In this step, both the parties are represented by the attorney. The arbitrator listens to both sides, studies their documents, testimony, evidence, and then decides. The process is the same as trial, but only with limited appealing rights.

This process is non-binding, but if both sides agree, then it can be a binding process. This is considered a critical step as a prerequisite to litigation in most places. A single person can carry out the process or a panel of three and is held in meeting rooms or hearing offices.

6. Litigation

One of the most common cases settled with business litigation is a breach of contract. In this step, the attorney is very important. Civil justice and system and courts are used in this step to resolve legal controversies. This step can compel the opposite side to participate in the solution.

The decision is made according to the law and by applying the facts presented. The final verdict concludes the litigation process, and the decision is enforced. However, the losing party can appeal to the higher court.

Solving a conflict is very easy at the initial stage, which is as simple as talking. But as the process gets intense, you have to get everything done legally.

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