An out-of-court settlement in a dispute is mutually beneficial if the:
A) difference between the parties' court costs is greater than the difference between their expected values from litigation.
B) sum of the parties' court costs is smaller than the difference between their expected values from litigation.
C) sum of the parties' court costs is greater than the difference between their expected values from litigation.
D) sum of the parties' court costs is greater than the sum of their expected values from litigation.
E) difference between the parties' court costs is smaller than the difference between their expected values from litigation.

Question

Quizplus · Accepted Answer

An out-of-court settlement is mutually beneficial if the combined cost of going to court (sum of the parties' court costs) exceeds the difference in what each party expects to gain from litigation. This scenario encourages both parties to settle to avoid the higher costs of litigation.

An Out-Of-Court Settlement in a Dispute Is Mutually Beneficial If