When you own a business, regardless of the type of business or how large it is, you run the risk of being sued and ending up in small claims court. Small claims court may seem like a scary concept, but it actually simplifies the legal process. You can avoid a lengthy and expensive trial, and hopefully get the matter resolved quickly. Here is more information about small claims court and what it could mean for your business.
Resolve Financial Matters
There are two main ways you can utilize small claims court as a business: to resolve financial matters or to deal with disputes with employees, customers, or clients. If you have customers or clients that have not paid their bills and would like to avoid dealing with collectors, you might be able to resolve these matters in small claims court. This often goes quickly because the cases are rarely uncontested. Your customer knows they owe money, so they will most likely show up and try to work out a payment arrangement with you. Since they don't want to deal with collectors or have their credit rating hit, they will most likely pay it all to you or as much as they can afford.
Before you head to court, you will need to provide evidence of the money the customer or client owes you. This might be a receipt and notices from the bank that claim a bounced check, or invoices that were never paid by the customer. You should also provide copies of all late notices you sent to the customer in an attempt to collect payment. Different states have stipulations with how old a debt must be before you can bring it up in small claims court.
Handle Contractual Disputes
While contractual disputes are less common in small claims court, they are another reason your business might be dealing with court cases. This may be a dispute your customer or client has against your goods, or a claim you are making against another company. For example, if you are a contractor and, when you used a certain tool or material for a building project, it failed to perform as suggested which then harmed the customer's home, you can bring this up in small claims court. You can also bring up contractual matters, such as if a guarantee was made in a written contract that a vendor or supplier did not provide.
Small claims court is not a trial court, so there will not be a jury deciding your fate. The matter is brought in front of a judge, though you should get an attorney to help you with your case. For help, contact a firm that specializes in business law.