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Litigation: Definition, Example and Related Terms

What is Litigation ?

Litigation is the process of taking a dispute to court for a resolution. In the context of contracts, it's like the moment when disagreements or breaches can't be resolved through negotiation or alternative dispute resolution methods, so the parties involved turn to the legal system to make a decision. This involves filing a lawsuit where the legal rights and obligations of the parties are determined by a judge or jury.

Litigation can be a lengthy and costly process, often involving several stages such as discovery, pre-trial motions, trial, and possibly appeals. It's critical for both parties to present evidence, legal arguments, and comply with procedural rules to support their case.

While litigation provides a formal resolution through the judicial system, its adversarial nature might strain relationships between parties. Contract managers should be aware of litigation risks and seek to include provisions in agreements that might help avoid litigations, such as arbitration or mediation clauses.

Litigation doesn't always result in a court trial; many cases settle before reaching the courtroom. However, understanding the potential outcomes and implications of litigation is essential for anyone involved in contract management or legal disputes.

Example(s)

  • Scenario Description
    A construction company is sued by a property developer for failing to complete a project on time and within the agreed budget. The litigation process will involve the developer filing a complaint in court, both parties engaging in discovery to exchange evidence, and potentially having a trial where a judge will determine if the construction company breached the contract and what remedies the developer is entitled to.
    A software company is involved in litigation with a competitor regarding allegations of intellectual property infringement. The competitor claims the software company has unlawfully used its proprietary code. The court will examine the evidence, including technical data and expert testimonies, to decide whether infringement occurred and what consequences or damages should follow.

Related terms