While most businesses are able to conduct their business transactions and provide their goods and services without legal issues, occasionally disagreements can arise over the expected course of a business transaction. When this happens either the consumer, the contractor or the business owner may find themselves in discord with one another. As a business owner, it is imperative that you know the proper steps to take to either resolve the situation yourself or to prepare yourself to take corrective legal action. If you do find yourself having to take formal action, seek legal advice from the experienced Sydney business lawyers at Owen Hodge.
Does you issue require legal action?
First, it is important to be sure that the right you want to enforce is one in which you have an ownership interest in. For example, does your legal issue pertain to any of the following;
- An Intellectual Property (IP) right that you still are able to enforce
- A copyright or trademark infringement
- Services you have provided but have not received the contracted compensation for
- Goods you have delivered and have not received payment for in part or in whole
- Goods or services you have made the contracted payment for but have not received in full or have been improperly delivered
Before taking legal action
In any of these instances where a breach of contract has occurred, it is important to begin the process of recovery by contacting the delinquent party in writing by certified post or via email. These methods are best as they both provide assurances and proof of delivery to the recipient, which will aid any future legal action. The initial contact should be both firm and friendly including;
- The name of your business
- A copy of the contract between the parties
- A brief explanation of the issue at hand
- A proposed resolution
- Time frame in which it is expected the party will perform and cure the deficit.
If you do not receive a response by the time frame set, it is recommended you make a second attempt with a similar letter expressing a greater urgency in resolving the matter and indicating that if the circumstances are not resolved, legal action might ensue. The second letter should include a copy of the first demand letter, the contract, and again be sent with the ability to prove receipt by the other party.
In the event that a second request does not yield a response or a workable solution, you will need to consider more formal legal action. First, review the contract for the stated manner in which issues are to be resolved. Many contracts require the parties to initially attend mediation. Some contracts prohibit the parties from using any form other than mediation. If your contract requires that mediation be used, in any form, you must use that avenue to attempt to resolve the problem. Alternative dispute resolution can be very successful and also cost friendly.
Evaluating the legal action needed
If mediation is not successful, you then must evaluate the following issues with regard to filing a lawsuit;
- Do you have a business attorney you trust to handle the litigation?
- Are you able to expend the financial resources it will take to fight the issue?
- Will bringing a lawsuit damage your reputation in the business community or destroy a long-standing business relationship with the pending defendant?
- Which court will you be required to file your lawsuit with?
Where to file your claim
- If your claim is for less than $100,000.00 you will file in your local court
- If your claim is for up to $750,000.00 you will file in district court
- If your claim is for over $750,000.00 you will file in supreme court
Do you understand the steps in the legal process including;
- Filing a claim
- Serving the claim on the defendant
- Responding to a counter or cross claim by the defendant
- Filing the necessary pleadings
- Going through the process of Discovery
- The need for subpoenas and/or affidavits
- Witness preparation, including your own testimony
- Setting aside the time for pre-trial and trial agendas
- Abiding by the final judgement
- Possibility of an appeal
While it is always best to resolve small business disputes amongst the interested parties or via alternative dispute resolution, there will be times when the circumstances are too complex and the financial stakes are too high. In these instances, legal action will most likely be necessary. But, before taking such action, consult with a business attorney and review the basics of your claim, it’s viability and the financial cost to your business to pursue a final determination. Only by methodically moving through each of these steps can you properly evaluate your likelihood of a successful outcome.
If you find yourself in need of assistance with this, or any other legal issue, please contact the Owen Hodge law offices to arrange a consultation with one of our Sydney business lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.