When is the right time to file suit in a business dispute? It depends on a number of factors. Filing a lawsuit is a drastic remedy and as a general rule alternatives should be pursued first. However, that is not always possible. Sometimes the matter at hand is an emergency and it is essential to get into court to seek an emergency remedy, such as a temporary restraining order. Other times, the statute of limitations may be rapidly approaching, such that you simply cannot wait any longer to file suit. In still other situations, there may be a strategic benefit to racing to the courthouse before your adversary gets there first.
But in the majority of circumstances, suit should not be filed until after you have notified your adversary of your potential claims and your intention to file suit if those claims are not satisfactorily addressed. This may take the form of a demand letter, a cease and desist letter, or a request for information or a meeting. Regardless of the form, you want to clearly lay out the factual and legal issues and give your adversary an opportunity to respond. Generally, you should put a deadline on the response, and that deadline should not be unreasonable.
What is accomplished by doing this? Several things. First, some cases can be settled and litigation avoided. More often, the case will not be settled, but the issues may be clarified and/or simplified as a result of a dialog with your adversary. Even in those cases where it becomes immediately obvious that a settlement is not forthcoming with a lawsuit being filed, I usually learn some information (factual or strategic) that I am able to put to use when drafting the lawsuit.