What questions should you be asking if you're considering bringing a lawsuit on behalf of your business? My name is Andrew Ayers. I'm a business attorney with offices in Edina Minnesota and New York City. And today we're going to talk about five different things that you should probably be considering before you bring that lawsuit. Now, as a business owner, a lot of what you do involves contracts. You're involved with customers. With vendors, with clients, whoever you're involved with. A lot of times, they're going to have some kind of contract that you want to deal with. Whether it's just simply an invoice, whether it's a statement of work, it could be a formal contract, that's 50 or 60 pages long, whatever that looks like. That tends to be the foundational document that takes care of your relationship with somebody else. And the question is, what do we do when something goes wrong under that contract? is a time to file a lawsuit? Are there other ways we can sort this out? What you don't want to do is just immediately run to the courthouse and file a lawsuit on behalf of your business. An initial problem may be that you might not be able to even do that because as you may know, businesses need to be represented by an attorney. So rather than pulling that trigger immediately, let's take a step back and look at five different things that you should analyze as to whether or not you should really bring a lawsuit. First thing is do you have evidence to support your claims? Now for looking at this is there evidence that they didn't perform under the contract? Is there evidence that somebody broke into your store and stole something? What kind of evidence do you have? Do you have documents? Do we have emails? Do we have the admissions Do we have a phone call, maybe a voice message or text message? There's all these different things we want to look at. It could be the possible source of evidence for a lawsuit. If you don't have any evidence. You may be thinking, how am I going to bring a lawsuit? Well, evidence doesn't have to be something written down. It can actually even be your testimony. You can have lawsuits where it's simply Jim Smith says this, And Jane Doe says that there's no evidence there's nothing in writing and at the end of the day, it comes down to the judge decide who's right and who's more credible. But we prefer we look at lawsuits that we have something in writing something that everybody knows about something we can look at, especially if there's a jury so we can figure out who's right who's wrong and what happened in this case. So one of the first things to do is look at that evidence, make sure you've got some things to support your client. The next step is why it's important to talk to a lawyer and that is what does the law say in your state? So or federal court, but whatever you're dealing with, you need to look at what does the law say? You may think you've been wronged. You may say I can't believe this happened to me. But then the law may say, well, even though it happened, you're not entitled to any damages. You don't get any money. Or you get one of those crazy verdicts you see in the news that says, Oh, you won this whole case it took weeks and your award is $1. And constantly in damages. What do you do then? You spend 100 grand on lawyers fees on a trial on expert witnesses, depositions, discovery, all for $1. That's when you want to ask this question at the front. And that naturally flows into the third question we asked, which is, have you suffered any damages? Let's say somebody breached the contract, let's say and I've talked about this before that your contract is for 1000 grave widgets, and you're gonna put them into a car. But instead the company sends you 1000 Silver widgets. It's the same size, it fits perfectly. Everything else in the car works, except for the fact that deep inside the engine, there's a little tiny part that's gray instead of silver. Has the other party breached the contract, technically is have you been damaged though. As long as these little widgets are working, the color probably doesn't matter. So that's what's called not a material breach of the contract. It's a breach. Technically, somebody breached the contract, but you don't really have any damages. Maybe your customers will never even look inside that engine and know that it was gray instead of silver or silver instead of gray. The fourth thing to look at as does the other party have a defense. So let's say you say they breached the contract. I can't believe they did it. But then we look at the contract and say wait a second, there's a force majeure clause that says if certain events happen, then that party doesn't have to perform or maybe like it's been recently we're having problems with the supply chain, and they were unable to get the parts and maybe your contract has provision that says if they're unable to obtain the right parts, then they don't have to ship them to you and there is no breach of the contract. There can be a variety of different defenses and you can see other videos on my channel that discuss the defenses you may have to a breach of contract. It's very important to understand what those defenses are, because although you may be able to bring a contract they may have defenses that mean you don't actually win a lawsuit. And the final thing you need to consider number five is can that other party actually
sued you? Now you may think what I breached the kind of I didn't breach the contract, they breached the contract. I didn't do anything wrong. But you never know. They may have other things they can sue you for it. Might have not have anything to do with the contract. But they may have the right to bring a lawsuit against you. And by you starting a lawsuit against them. They say you know what? We're stuck in court anyway. I'm still mad about that thing that happened three years ago, so let's sue them to let's have a counterclaim for them. For something that happened a while ago. Now, by bringing your lawsuit and maybe you don't have a ton of damages, you may have exposed yourself to a countersuit that actually entitles them to more money than you're gonna win. And so by bringing a lawsuit, you're gonna pay all that money for an attorney, and you're still going to owe the other side money because their lawsuit is worth more than yours. Now, this isn't a complete list of issues you should look at. There's a lot of different things that can happen when you're creating a lawsuit and deciding whether or not you should sue somebody. So it's important to work as professionals on things like this. We want to work with those attorneys work with those financial advisors that can tell you whether or not this is even a good financial sentence to bring these lawsuits. This is not something you want it to yourself. As I mentioned before, companies cannot represent themselves in court. So if you're representing if you're running a business, and you need to bring a lawsuit, you're going to have to speak to an attorney anyway. So while you're doing it, sit down, talk to them. For an hour or two, go over the evidence go over the claims. Discuss what the law is, have there been damages or their defenses the other party has? Could you be sued on the counterclaim? These are all things to bring up an attorney so you make sure before you bring that lawsuit before you spend all that money on your attorney. You know what you're getting into, and that it really makes sense for you and your business.