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Will commercial litigation damage your working relationships?

On Behalf of | Mar 7, 2022 | Commercial Litigation |

Maybe a vendor made an unapproved substitution and provided your company with mediocre materials while charging you the full price. Maybe the company that you hired for social media management has yet to even send over a proposal, let alone take control of your company’s accounts despite taking your deposit.

A dispute with another business can arise for any number of reasons. If you have already attempted to resolve the issue by pointing out the problem to the other business and have received no response or uncooperative communication, your business may suffer a loss.

Will initiating commercial litigation against the other party damage your working relationships?

Litigation is often part of doing business

For the most part, the other companies that you do business with should recognize that sometimes litigation is inevitable. If you have a contract that someone else has breached and they do not commit to a resolution through informal communication, you have no option other than to enforce your contract, potentially through the courts.

With occasional exceptions, most businesses will not take issue with your company occasionally engaging in necessary litigation to enforce or terminate contracts with a non-compliant party. Establishing that your company will enforce its contracts through the courts if necessary can help deter others from following the example of the other company involved in your contract dispute.

The companies you do business with in the future will probably understand if you include a mediation clause or a collection policy in your contract. While you still want to secure a favorable outcome to the situation in court, you can also treat it as a learning opportunity to protect your business from similar misconduct in the future.

Even the relationship with the other party could be salvageable

A significant portion of the breach-of-contract lawsuits filed between businesses settle outside of court. The other company may eventually work with you to resolve the matter to avoid the expense and unpredictable risks of litigation.

While some executives may hold a grudge over your business filing a lawsuit, others may still do business with your company after you resolve the lawsuit. Short-term reputation damage caused by filing a lawsuit should not deter you from holding another party accountable for their contractual failures.

Knowing when to pursue civil litigation can help business owners and executives minimize the impact of another company’s failure on their business’s operations.