When to Resolve Your Business Dispute in Small Claims Court

Disputes are very commonplace in the business environment. You might have had to disagree with a business partner or a client over certain issues. These issues occur over a spectrum and range from simple to complex and complicated. Special courts have been created to cater for various types of disputes. Keep reading to learn when to resolve your business dispute in small claims court.

It is a court set up to cater for simple claims that fall within a specified limit for the money involved. The court is set up to treat cases in an expeditious manner. Unlike regular courts, it does not operate by strict rules of evidence. This means that you don’t need to hire a lawyer before you can make a successful claim. Your claim will not go through an elaborate litigation process.

Claims made in Small Claims court usually involve unpaid bills, contractual relations, landlord tenant relations, and other types of disputes. For instance, your customer owes your business some money for goods supplied. They have refused to pay despite several demands. If the financial value is less than the maximum jurisdictional limit of the court, you should file your case at the Small Claims court.

The Small Claims court is best suited for your business disputes because it is not as expensive or as complex as the regular court system. It is fast and you will be able to move on quickly so you can focus on your business.

Business disputes usually go to a Small Claims court in the following instances.

Recovery of Unpaid Fees

Most business owners who take their case to Small Claims court do so because they are finding it difficult to get paid for some product or service that they have provided. Unpaid fees can also be unpaid loans, rents or bounced checks. Small Claims court is particularly cost-effective for collecting unpaid bills because it removes the need for bill collectors and lawyers – who often keep, as their fee, a huge chunk of what they collect.

Most times, defendants do not contest claims for unpaid bills. They know that they owe the money and do not have any defense or they don’t show up. So you need little preparation or court time to get your claims. The court just orders payment and you enforce. But, in certain cases, you must have hard evidence that the defendant owes you a debt. If a defendant mounts a defense, the courts looks at both sides before making a pronouncement.

Breach of Contract Claims

Contractual disputes between two businesses or a business and a customer are also common in Small Claims court. A contract is a legally binding exchange of promises or an agreement between parties to deliver goods, money, or services. A breach of contract case usually comes from a party’s failure to perform some terms of the contract, without some legitimate legal excuse. Examples include not completing a job, not paying in full or on time, failing to deliver goods sold or promised, poor quality service and many others.

A contract dispute is, at its core, a disagreement over who breached the contract. So the challenge is on the facts of the dispute or the law of contracts. You will need to gather all the evidence you have of what transpired, and how the defendant failed to deliver on their promise.

For instance, if a contractor delivered to you goods that are of substandard quality, you should first establish what the contract states. Next, you should prove why what was offered was substandard. You should get testimony from someone qualified that the goods supplied are below the quality expected of such goods in your line of business. Besides preparing your case, remember to take into account what the other side will argue, and prepare adequate responses.

Instead of waiting around for months, as it happens in regular court, the judge will either pronounce a decision on the spot or in a few days. Either way, both sides will know where they stand and be able to get back to business.

Landlord and Tenant Relations

Disputes arising between landlords and tenants are also very common at the Small Claims court. These could be claims over a security deposit, unpaid rent, or damage to a rental unit. You could also be trying to evict a tenant from a rental property or defending your right to stay in the property.

In a claim for failure to return a security deposit, you need to prove that you made a deposit. That you did not damage the premises and it was sufficiently clean when you left. That your deposit was not returned, and the landlord owes you some or all the amount withheld.

Tort Claims

A tort is a wrongful act, other than a breach of contract, that results in injury to a person, business, property, reputation, for which the injured person is entitled to compensation. Cases involve claims for such things as personal injury, negligence, nuisance, fraud, and many others. You have to prove that the careless or intentional behavior of the person you are suing has caused you to suffer personal injury or has damaged your personal property or harmed your business.

Sometimes, defamatory statements – written (libel) or spoken (slander) – are eligible for Small claims court in some states. Thus, when a person or business says something untrue about your business that has damaged your reputation and affected your business, you can go to the Small Claims court for compensation.

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Take Away (When to Resolve Your Business Dispute in Small Claims Court)

There are many more case types that can you can file in a Small Claims court. What makes small claims unique from other courts is the specific limit on the amount you can recover. Each state has established a maximum monetary limit. If your dispute exceeds your state’s limits, you may have to file your case with a regular superior court.

To be successful in your claims, always make a specific and realistic claim. Maintain careful recordkeeping in all your dealings. Provide the evidence you have to the court and anticipate the defendant’s possible argument.

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