This article explains what to do when a claim is filed against your business and when claims are useful to protect your business.
Someone is suing your company. What do you do now? How can you beat the claim against the company? When a legal suit is brought against a business, it is important to contact a business law attorney to review several things in the original contract.
When a claim is made against your company, the first thing to do is to review the agreement or contract. Outline the responsibilities of each party, list what each party would do, examine the timeline for completing the service or delivering the goods, review the pricing and payment section of the contract, and check the terms listed if things do not go according to plan or one party does not fulfill their commitment to the other. It is essential to know the responsibilities of each party and note them in the analysis as the company prepares a defense against the claim.
It is important to note if there are any discrepancies in the behavior of the company or the behavior of the party filing the suit. Did one party violate the terms of the agreement in any way? The outcome of the suit will be affected if discrepancies exist in the actions of either party. Did the party filing suit neglect their contractual obligation in any way? Report the damages and prepare an explanation of why the actions or inactions of the other party hurt the company. This counterargument will serve as part of the defense for the company.
When should a company file a claim?
A company can sue a contractor or business to protect its business interests. If contract terms are broken and cause the business harm, filing a legal claim may be the right move to help the company recover the damages. A legal claim is a useful tool for businesses when a subcontractor or business acts unprofessionally or does not uphold their end of a contract to provide goods or services on time or according to the terms of the agreement.
The company needs to prove that the actions of the other party caused the business pain, loss of revenue, or other damages. Imagine that a restaurant hired a company to create a website for the business. The restaurant uses the website to provide customers with an online ordering option. If the website is not created on time the restaurant could sue the website creation company to recover lost revenue. The restaurant would have to prove that the actions or inactions of the website company caused them financial harm.
A sound contract with clearly defined terms and conditions provides a strong operating agreement for businesses to work together. Using a business attorney to draft or review contracts prior to signing and making them official put companies in a strong position and may help avoid future litigation if things go wrong with a deal.
Our team of business law attorneys brings years of experience in business contracts and operating agreements to our clients. Contact us today for help with your contract questions or for assistance with claims against your company.
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