Many disputes over contracts are ultimately settled out of court

It is not always necessary for Illinois businesses to go to court in order to settle a contract dispute. Many contracts contain arbitration or mediation clauses that provide a more economical avenue for settling the parties' differences. Sometimes, however, the parties initiate arbitration or mediation but are then able to reach an agreement on their own.

For instance, Healthways, Inc. and BlueCross BlueShield in an upper midwestern state recently came to a settlement prior to attending an arbitration hearing. The settlement requires Healthways to make two payments to BlueCross, a former client, totaling $9.4 million. BlueCross may avail itself of Healthways' well-being services in lieu of the second payment of $5.5 million, which is due to BlueCross in January 2015.

BlueCross BlueShield Minnesota initiated its claim against Healthways, claiming it did not fulfill its contractual obligations to BlueCross. Despite the settlement, Healthways maintains that it complied with the contract and performed all required services. Further, the company denied the allegations of BlueCross in a recent SEC filing.

It is not necessary for Illinois businesses to admit violating their contracts in order to settle a claim. Sometimes, settlement is the best option for a company. In order to make this determination, it is crucial to review and analyze all of the business and legal issues regarding a situation. Once the pros and cons have been weighed, a course of action can be identified that will allow the company to not only continue but also thrive in the future. If the decision is made to settle, negotiations can begin to draft and execute an agreement with which the parties will be satisfied.

Source:, "Healthways to pay $9.4M to settle contract dispute", Shelley Dubois, April 17, 2014

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