The term litigation is used to provide a description of the proceedings that are being initiated between two parties for the enforcement or for the purpose of defending a legal right.
What Is a Litigation Agreement?
This agreement is a settlement agreement between the parties who are involved in a legal battle in an attempt to defend a legal right. However, the case may be decided by the court, even if there is an agreement.
Who Takes a Litigation Agreement?
A litigation contract is taken by two opposing parties who are defending their legal rights in the court of law.
What Is the Purpose of a Litigation Agreement?
The basic purpose of this agreement is to provide a basic and affordable resolution to the dispute between the parties involved so that it can reduce the cost of litigation. Thus, this agreement is also known as the “Settlement Agreement.”
Contents of a Litigation Agreement
The following are some of the contents of this agreement;
- Name and address of the parties involved
- Names of the litigators and their addresses
- Date of the agreement
- Duration of the agreement
- Commencement of the agreement
- Terms and conditions of the agreement
- Methods of termination of the agreement
- Conditions in case of breach of agreement
- Remedies available, if any
How to Draft a Litigation Agreement?
The following is the process to draft this agreement; Mention the below details
- The name and address of the parties involved and litigators of each party
- The date and duration of the agreement
- The effective date of commencement of the agreement
- The clauses, terms, and conditions of the agreement
- The methods of termination, what happens in case of breach and also, the remedies.
- The Governing laws of the state
- Ownership that states representation of both the parties as sole owners of claims, demands, actions, etc.
- Issuance of notices and when it should be deemed as “received” by the parties involved.
- Remedies to be exercised on receiving written notices of the breach, in case of breach by either of the party.
- Retention of only the legal and valid intent of the agreement with a provision to debar the void clauses/portions from the same agreement, if rendered illegal/void.
The negotiation aspect in the case of this agreement completely depends on the mutual understanding of the parties. However, the legal professionals of both parties would play a major role in the negotiation preferences.
Benefits and Drawback of a Litigation Agreement
Benefits: As explained earlier, the agreement helps to reduce the cost of litigation, which is very high these days. Moreover, it helps to provide a good resolution that can benefit both parties in the long term.
Drawbacks: The major drawback is that it is a consuming and lengthy process.
What Happens in Case of Violation?
In case of violation of the agreement, the violating party will be sued by the breaching party, and the breaching party can claim compensation for the damages for losses suffered as a result of a breach of the agreement.
This agreement is a settlement agreement between the parties who are involved in a legal battle to defend a legal right. However, it is to be noted that the matter between the parties can also be decided by the court, even if there exists a Litigation agreement.
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