A rolling contract is a type of agreement that offers plaintiffs greater flexibility and lower costs compared to traditional lump sum funding agreements. This contract structure is particularly beneficial in the context of lawsuit funding, where plaintiffs receive financial support while waiting for a settlement or court verdict. Unlike lump sum contracts, which provide the entire amount of funding upfront, rolling contracts disburse funding in smaller, periodic payments, which can extend over months or even years. This approach allows plaintiffs to access the necessary funds without incurring excessive fees.
What is a Rolling Contract?
A rolling contract is a flexible funding option for plaintiffs involved in a lawsuit. Rather than receiving the full funding amount in one lump sum, plaintiffs receive smaller, monthly payments until they have received the full agreed-upon amount. The primary benefit of this structure is that it reduces the accumulation of fees since the total amount funded is lower at any given time. If the plaintiff’s financial needs change, they can stop the payments and only incur fees based on the amount they have already received. This flexibility can be advantageous for individuals who do not require the full amount immediately or wish to control the amount of funding they take on.
Key Considerations Before Signing a Rolling Contract
Before committing to a rolling contract, it is crucial for plaintiffs to review certain key factors to ensure they fully understand the terms and conditions of the agreement. These include:
- Terms of the Agreement: As with any legal document, the terms of a rolling contract should be carefully reviewed. Plaintiffs must ensure they understand the specific details of the agreement, including the payment schedule and any associated fees.
- Tenure: The duration of the contract, or how long the payments will continue, should be clearly defined. Plaintiffs should understand how often the contract renews and the frequency of the disbursements to avoid any surprises later in the process.
- Termination Rules: It is important for plaintiffs to fully understand the process for terminating the contract if needed. This includes knowing how to give notice of intent to terminate and any potential penalties for early termination.
Lawsuit Funding as a Rolling Contract
Lawsuit funding, also known as litigation funding, is a financial solution for plaintiffs who are involved in a lawsuit and need money to cover living expenses, medical bills, or other financial obligations while awaiting a settlement or favorable verdict. Plaintiffs can opt for lump sum funding or a rolling contract, depending on their financial needs and preferences.
The advantage of a rolling contract in lawsuit funding is that it provides plaintiffs with ongoing financial support throughout the litigation process. By receiving consistent payments over time, plaintiffs can better manage their expenses and avoid the pressure of accepting an unfair or hasty settlement. Additionally, rolling contracts typically have lower fees compared to lump sum funding arrangements. If the plaintiff wins their case, the legal funding company is reimbursed from the settlement, but the amount taken from the proceeds is often less than with a lump sum agreement.
In the event that the lawsuit is unsuccessful, plaintiffs are not required to repay the funding, making legal funding a low-risk option for individuals in need of financial assistance.
Conclusion
Rolling contracts in lawsuit funding offer a flexible, lower-cost alternative to traditional lump sum funding. With the ability to receive payments over time, plaintiffs can better manage their financial needs during the litigation process without incurring excessive fees. It is important for plaintiffs to carefully consider the terms, tenure, and termination rules before signing a rolling contract to ensure it aligns with their needs and expectations. For those seeking financial support while awaiting the resolution of their lawsuit, rolling contracts provide a viable option that can help alleviate financial stress and ensure the pursuit of a fair settlement or judgment.
