Is there a rule of thumb for determining the amount one should accept for a settlement offer in the U.S.? For this question let's use the amount of $200,000 owed to the plaintiff by the defendant in a breach of contract dispute. Is there a rule of thumb for calculating how much you should accept in a settlement? Some factors: The monies owed are for specific damages based on transactions and do not include anything arbitrary such as emotional damages, etc. 50% of the $200K is based on a verbal agreement and past practice If I had to estimate the odds for a trial, I would put them at 70/30 for the plaintiff
Legal question, statistical (economic) answer. You need to evaluate the expected value of an outcome which is the sum of the product of probability of winning and the gain (or loss) from winning and the product of the probability of losing and the gain (or loss) from losing. As a mathmatical expression: Expected value = [P(winning) x gain] - [P(losing) x loss] For your example, for the plantiff it would be: Expected value = 70% * $200,000 + 30% * $0 = $140,000 Take the expected value and compare that to your settlement. For the plaintiff, any settlement offer above $140,000 to a rational plaintiff (can't emphasize rational enough) is a good deal and they should accept. Any offer below $140,000 would be a good deal for a rational defendant. Going to trial is what happens when the parties are either irrational or estimate different/more favorable odds or outcomes. Now this doesn't account for lawyers' fees incurred which will depend on whether you are on contingency or not but this can change your outcomes. Because of these fees, many insurance companies tend to just pay out for minor claims since the cost of winning in court even if it is certain is a higher cost than the claim. Addressing Some Good Comments: There are additional factors such as court fees, time value of money (settlement happens now, courts take years), publicity, establishing or overturning precedent, disclosure, marginal utility of money for the plaintiff, emotions from testifying, deterrence of future law suits, and infinitely more possible elements of a lawsuit that all affect the value of a given outcome win, lose or settle. All good points brought up by commenters (Thank you all). These are important considerations that vary the gain (or loss) from winning and loss from losing but are 1.) beyond the scope of this question and 2.) too broad to be addressed if it was. I think it is keep in mind that this is for the person receiving a settlement offer to estimate and decide within the limits of their assumptions, values, and bounded rationality. An amended expression is attached to account for fixed costs of trial: Expected value = [P(winning) x gain] - [P(losing) x loss] - fixed costs of trial
united-states Meet the word &quot;clawback&quot;. The general rule is that anything you do simply for asset protection can be undone by the government or courts. See the excellent book by Adkisson and Riser titled Asset Protection. First, the creditor is going to ask about all your assets including transfers. You have to answer truthfully, or else you open a whole other can of worms. The creditor and court will look at the character of these transactions. Suppose you sell a Ferrari worth $200,000 appraised value, to your brother for $155,000. However, it was an open eBay auction. Plaintiffs review it, hoping to find it was a &quot;vest pocket&quot; sale rigged to be unappealing to anyone but family. Wrong: it was a competent and earnest listing, which did attract 12 stranger bidders, and 3 bidders took up your offer to let them inspect the car. And according to Ferrari brokers that price was realistic given the soft market. Your brother simply outbid them, for nostalgia reasons. You did get the money and did use it to settle with creditors. That sale will be considered legitimate, because there's extensive provenance held in reliable third party hands (eBay). You sell the Ferrari for $100 to your brother. The court will presume that you intend to buy the car back for $100 after your legal troubles have cleared. This sale will be declared invalid, the Ferrari clawed back, and the creditor will be able to target that asset. The same thing can happen if you are insolvent, expect to enter bankruptcy, and pay a creditor &quot;out of turn&quot;. E.G. you settle your debt with the country club (so you can keep attending) before you pay your tax bill. The creditors, IRS or court can &quot;claw back&quot; that payment. That happened to my family's business once. Meet the word &quot;Penalties&quot;. OK, so what does a dumb crook do? They lie about their assets. They testify &quot;I crashed the Ferrari on the property, it was a basket case. I parted it out and chopped up the rest, threw it in the weekly trash week by week&quot;. And they can produce no documentation of any part sales. Meanwhile, plaintiff had already pulled DMV records and found it's currently registered... to the brother, with a DMV sale price of $100. They sent over a detective, who has pictures of it sitting in the brother's garage. And plaintiff gleefully maneuvered the dumb crook into a lie under oath. And now they face judicial punishment - including harsh fines, and jail for contempt of court or refusal to disclose. This bypasses the Fourth Amendment, so there is no trial for proof of guilt. But it's a government agency, not a private party All the moreso, then. Government has the right to bypass some of the rules for private parties - such as being able to do asset search, subpoena, or attach assets without filing a lawsuit. The IRS is probably the most experienced at pursuing asset hiders. They have &quot;their own&quot; Tax Court which does exclusively tax cases.
There is no fixed rule for this. Every situation is different, and of course there is nothing specific to software in there. It is very much a matter of intent. For example, negative profits are no clear sign. Company X thinks they could make $6 million profit by developing a product and selling it, minus $4 million development cost. It turns out development cost is $10 million. Raising prices is not possible because of competition. Company X will suffer losses of $4 million, without being predatory in any way. The reality is that a judge will look at the situation, take everything into account, and make a decision based on what they see. Since this is all about competition law, the main point is the intent or effect that your pricing makes competition impossible. That's what the judge will decide. For example, if you offer your service for $500,000 while others offer a similar service for $1,000,000 you could be using some super efficient processes that allow you to make money at that price, or you might have an idiotic sales person who will drive your company into bankruptcy, or you are trying to drive your competitors out of business. That's what the judge will decide.
In German Law you need to give your agreement ("Willenserklärung") to a contract or in this case terms of service. This is done by telling the other part. In some cases this can also be implied by an action (example: putting your bottle of beer onto the cashiers table is an offer to buy this bottle). As a second criteria a "Willenserklärung" needs to be the exact will of the part that declares its will (the website user in this case) §§ 133, 157 BGB or that the other side (you) could only see so (not the case here as this mainly speaks of content). If you visit a website and there are terms of services, the "Willenserklärung" is only given when the user read and agreed to the terms. If he did not, the terms of service are not applied until the user agrees to them. So I would recommend to block the website until the user agreed (overlay) as you need to proof he did when in court. Additionally there are so called AGB's in Germany. Those are contracts that are used or planed for many (more than 3) uses and set by one side (you). This may apply here, so you need to follow a lot of other rules like making sure the user had access and agreed, then there are many content restrictions and so on... I recommend consulting a German Lawyer specialized on this topic as this is very complex and includes other German laws for Media too, depending on the content of your site and terms. Also note that everything said is only based on my own knowledge and can not be used as safe legal source.
However, can I ask the person provide me money in exchange that I am not going to call police? First of all, the conduct you describe is a tort, in addition to possibly being a crime, and so you could ask them to provide you with money in exchange for a release from tort liability (i.e. not suing them). This is done all of the time and is perfectly legal, although if one is afraid of extortion claims, the safer course would be to file the lawsuit first (and possibly also report the crime to the police first) and then to seek money damages. Once a criminal complaint has been filed and an accusation made publicly, there is no "extortion" element. A lawyer would not be permitted as a matter of professional ethics from proposing a settlement in exchange for not contacting the police, but could obtain money with a threat of civil liability. This is not obviously within the definition of extortion, because reporting them for committing an actual crime would not necessarily be "wrongful" conduct in every situation, and wrongful use of "fear" is one of the elements of the California crime for extortion. But, it is clearly within the definition of "fear" which is defined to mean: Fear, such as will constitute extortion, may be induced by a threat of any of the following: To do an unlawful injury to the person or property of the individual threatened or of a third person. To accuse the individual threatened, or a relative of his or her, or a member of his or her family, of a crime. To expose, or to impute to him, her, or them a deformity, disgrace, or crime. To expose a secret affecting him, her, or them. To report his, her, or their immigration status or suspected immigration status. This definition makes no reference to the validity of the accusation. It might be possible to determine with more case law research when threatening to report a crime that they have committed is "wrongful use" of "fear". My expectation is that this is something of a gray area and may be quite fact specific (it is not a point upon which there is great uniformity between U.S. states). This excerpt from a California Supreme Court decision helps clarify the line between a legitimate threat and an extortionate one (case law citations and references omitted), and tends to suggest that insisting on money, hinging on a threat that the a criminal complaint will be made otherwise, does constitute extortion in the State of California, even when made by the victim in the case of a crime that was actually committed: Extortion “Extortion is the obtaining of property from another, with his consent ... induced by a wrongful use of force or fear....” (Pen.Code, § 518.) Fear, for purposes of extortion “may be induced by a threat, either: [¶] ... [¶] 2. To accuse the individual threatened ... of any crime; or, [¶] 3. To expose, or impute to him ... any deformity, disgrace or crime[.]” (Pen.Code, § 519.) “Every person who, with intent to extort any money or other property from another, sends or delivers to any person any letter or other writing, whether subscribed or not, expressing or implying, or adapted to imply, any threat such as is specified in Section 519, is punishable in the same manner as if such money or property were actually obtained by means of such threat.” (Pen.Code, § 523.) Extortion has been characterized as a paradoxical crime in that it criminalizes the making of threats that, in and of themselves, may not be illegal. “[I]n many blackmail cases the threat is to do something in itself perfectly legal, but that threat nevertheless becomes illegal when coupled with a demand for money.” The extortion statutes “all adopted at the same time and relating to the same subject matter, clearly indicate that the legislature in denouncing the wrongful use of fear as a means of obtaining property from another had in mind threats to do the acts specified in section 519, the making of which for the purpose stated is declared to be a wrongful use of fear induced thereby.” “It is the means employed [to obtain the property of another] which the law denounces, and though the purpose may be to collect a just indebtedness arising from and created by the criminal act for which the threat is to prosecute the wrongdoer, it is nevertheless within the statutory inhibition. The law does not contemplate the use of criminal process as a means of collecting a debt.” In Beggs “we explained that because of the strong public policy militating against self-help by force or fear, courts will not recognize a good faith defense to the satisfaction of a debt when accomplished by the use of force or fear”; For purposes of extortion “[i]t is immaterial that the money which petitioner sought to obtain through threats may have been justly due him”; “The law of California was established in 1918 that belief that the victim owes a debt is not a defense to the crime of extortion”. Moreover, threats to do the acts that constitute extortion under Penal Code section 519 are extortionate whether or not the victim committed the crime or indiscretion upon which the threat is based and whether or not the person making the threat could have reported the victim to the authorities or arrested the victim. Furthermore, the crime with which the extortionist threatens his or her victim need not be a specific crime. “[T]he accusations need only be such as to put the intended victim of the extortion in fear of being accused of some crime. The more vague and general the terms of the accusation the better it would subserve the purpose of the accuser in magnifying the fears of his victim, and the better also it would serve to protect him in the event of the failure to accomplish his extortion and of a prosecution for his attempted crime.” Attorneys are not exempt from these principles in their professional conduct. Indeed, the Rules of Professional Conduct specifically prohibit attorneys from “threaten[ing] to present criminal, administration, or disciplinary charges to obtain an advantage in a civil dispute.” (Cal. Rules of Prof. Conduct, rule 5–100(A).) In Libarian v. State Bar we upheld disciplinary action against Librarian who, after losing at trial, sent a letter to opposing counsel, accusing his opponent's client of perjury and threatening to use the perjury charge as the basis of a new trial motion and a criminal complaint unless opposing counsel's client paid Librarian's client. “Although no action was taken either by Librarian or Siegel to prosecute Nadel, the record clearly shows conduct which is in violation of Librarian's oath and duties as an attorney. The threats contained in the letter indicate an attempt to commit extortion. The sending of a threatening letter with intent to extort money is ‘punishable in the same manner as if such money ... were actually obtained’ (Pen.Code, § 523) and the crime of extortion involves moral turpitude.” The conduct of an attorney who threatened an oil company with reporting adulteration of its gasoline to the prosecutor unless it paid his clients was not only grounds for disbarment but “constituted an attempt to extort money as said crime is defined in sections 518, 519 and 524 of the Penal Code”; attorney's suggestion in letter demanding $175,000 settlement in divorce case that he might advise his client to report husband to Internal Revenue Service and United States Custom Service constituted “veiled threats [that] exceeded the limits of respondent's representation of his client in the divorce action” and supported attorney's extortion conviction]. As these cases illustrate, a threat that constitutes criminal extortion is not cleansed of its illegality merely because it is laundered by transmission through the offices of an attorney. Bearing these principles in mind, we turn to the instant case. Flatley v. Mauro, 139 P.3d 2, 15–21 (Cal. 2006).
So you entered a contract that was a bad deal. The law says: tough People are legally allowed to make bad deals. The law will hold you to the bad deal you made. If it only worked for good deals, no one would ever use the law because you don’t want to break a good deal. Providing it has all the required elements of a contract, it will be enforceable. Put up with him or pay him out.
Written Contract If there was a written contract, the fact that it wasn't signed is not relevant. While a signature is evidence of agreement with the terms there are other ways that acceptance can be indicated: like you paying them $600. Wrong Information Where the error is fundamental to the performance - e.g. you needed shipment to Alaska and they were offering shipment to Alabama, the contract would be void ab initio. That is, it never happened and everyone needs to be returned to their original positions as far as possible. However, in general, an error by one or the other party in their understanding of what was agreed does not invalidate the contract. For example, if you told them it was a "small" dog because it was small for a Great Dane but under an objective classification, it is, in fact, a "large" dog the contract must be completed and either you or they wear the additional cost of doing so. Whether they are entitled to ask for additional payment "due to some wrong information" depends on who took the risk under the contract for its correctness? Barring a specific term, the risk usually lies with the party that provided the "wrong information" but some contract will assign the risk for one party's errors to the other party - subject to a requirement to act in good faith. If they are not entitled to additional payment, they have to perform the contract for the original fee. If they are entitled, then you have to pay a reasonable price increase - you are not generally entitled to cancel. All of this turns on the specific terms of the contract and the exact nature of the "wrong information". Consumer Protection Law CPL in your state or their state or both will almost certainly have something to say about this beyond common law rules of contract.
Bill and Jane are free to enter into a contract where, among other things, each provides valuable consideration; in this case Bill provides valuable lawn mowing services and Jane provides valuable money. In week No 1 they have negotiated the terms and the contract is complete when Bill mows the lawn and Jane pays the money. If Bill turns up next week without Jane's instruction then there is no contract and Jane does not have to pay anything; I don't think this is what you are asking but I include it for completeness. If it is understood that this arrangement continue week after week then either there is an ongoing contract or, more likely, a series of independent contracts. If there is an ongoing contract, then it can be renegotiated but it cannot be changed unilaterally by Bill. That is, he cannot unilaterally increase the price to $2. If there is a series of contracts then the terms of each of those contracts will be the same based on the course of dealing. Basically, the parties have accepted over a long period of time that the rate for a mow is $1 and Bill would have to get Jane to accept the revised rate before he mows the lawn. For your example, Jane owes Bill $1 but if she wants him back next week she will have to agree to Bill's rate.