What is described by the term "litigation" in contract disputes?

The term "litigation" specifically refers to the legal process involved in resolving disputes that arise from contracts. This process typically occurs in a courtroom setting and can involve various legal actions, including filing lawsuits, presenting evidence, and making legal arguments. It is essential for parties to have a clear understanding of litigation as it relates to contracts, especially when a disagreement arises that cannot be settled through negotiation or alternative dispute resolution methods.

In contrast, negotiation refers to the discussions that happen before a contract is formalized, drafting involves the creation of the contract itself, and compliance review pertains to ensuring that both parties adhere to the terms and conditions set forth in the contract. These processes all play important roles in contract management but do not encompass the legal actions taken when conflicts cannot be resolved amicably.