Negotiation Breakdowns: How to Know When It is Time to Litigate

Christopher Travis

In business disputes can occur more often than desired. Whether it is an unhappy employee, vendor, or partner, people often end up at cross purposes. Having conflicting views on how things should be done, what the contract says (or does not say), how much should be paid and when, to name a few. In most cases, these disagreements can be resolved through skillful negotiation or mediation, but on occasion, the divide is so wide that your best hope of getting a fair resolution is through the courts. That being said, litigation can be costly–and unless you have verifiable proof that the other party is at fault, it can also be risky. So how do you know when it is time to walk away from the table and start litigation?

Recognizing early signs of a failed negotiation is crucial to minimize damage and take appropriate action. So, let us look at a few telltale indicators.

Communication Failures

Sometimes, despite your best effort the other party simply does not communicate well. If communication with the other party continually breaks down, despite efforts to clarify and understand each other’s positions, this can indicate that further negotiation will not yield positive results. Even worse, if the other party simply stops communicating altogether, it may be time for next steps.Unwillingness to Compromise

One of the clearest signs that negotiations are failing is when the other party seems unwilling to negotiate at all. This could be displayed through constant rejection of offers, refusal to compromise, or an overall lack of engagement in the negotiation process. The other party is convinced that they are in the right and have no need to compromise, or perhaps there are hidden motives. Whatever the case, if you find yourself facing an unmovable opponent with no willingness to give ground on any issue being discussed, it may be time to start considering other options.Breach of Agreement

If the other party breaches a pre-existing agreement or contract during negotiations, this demonstrates a lack of trust necessary to find common ground. It indicates a disregard for legally binding agreements. If the original agreements are broken, it is more likely that negotiating disputes will also be challenging. At that point, you may need something stronger than a mutually negotiated agreement to preserve your rights.

Dishonesty or Deception

Some level of trust is vital to successful negotiations. If you discover that the other party has been dishonest or deceptive in their dealings with you or during negotiations, it constitutes an act of bad faith. Examples could include misrepresentation of facts, hiding information, or engaging in fraudulent activities. If these signs are present, it may be time to consider taking legal action.

Deadlocked Talks

Despite your best efforts to reach a resolution, some negotiations simply end in a deadlock where neither party feels they can budge on their position. When all options have been exhausted and no progress is being made, litigation might be the next logical step–especially if the lack of resolution is disrupting your day-to-day business activities or if there are extenuating deadlines pressing.

When Your Attorney Tells You It is Time to Litigate

As a rule of thumb, litigation should be considered as a last resort. However, there are exceptions to this rule. Even if all signs seem to point to productive negotiations, a good general counsel will be able to observe indicators that you may not be able to see. They know the law well and can advise you on when to walk away from a negotiation. It is important to listen to their advice as they are best positioned to help protect your interests and ensure that any agreement is legally sound. 

At Travis Law, we have experience with dispute resolution for businesses like yours. We can help you with best strategies for a favorable resolution, engage in skillful negotiations, advise you when litigation is your best option, and when necessary, fight for your best interests in court. If you are facing a dispute situation, we are here to help. Contact us today to learn more.

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