Contracts have been called the lifeblood of a business, and when unexpected troubles interrupt the flow, the health of the enterprise is affected. Being sued for breach of contract can greatly tax your business, costing you legal fees and exposing you to the risk of paying monetary damages. If you have been sued or believe that you might be sued, there are prudent steps you should take.
Even if you have not yet been served with a complaint, consult with a business attorney about the risk of litigation and how to prepare. At your initial consultation with the attorney, you should bring a copy of the contract, your business liability insurance policy and any other relevant documents. Your attorney can review the situation and your relationship with the prospective plaintiff and can advise you about possible actions to avert the suit.
Once you are sued, you should immediately contact your insurance carrier. You may hold a general liability policy, a commercial property policy or a business owner’s policy that includes both. Provide the carrier with a copy of the complaint and answer any questions the insurance adjustor asks about it. If your policy covers the dispute, the insurance carrier has a duty to defend you, which means that it must provide you with capable legal counsel. If you don’t have a policy that covers the dispute, you must retain your own lawyer.
Your attorney, whether provided by the insurer or retained by you, will take the following steps as appropriate:
- File a motion to dismiss the complaint, based on any substantive or procedural defects.
- File an answer to the complaint, listing your defenses and raising any counterclaims you might have against the plaintiff.
- Conduct discovery, which is a set of procedures for obtaining information from the opposing party, which could include requests for production, interrogatories (written questions) and depositions (oral questions).
- Help you respond to discovery and represent you and your employees during depositions.
- File and respond to pretrial motions.
- Conduct settlement negotiations on your behalf.
- Prepare evidence and witnesses for trial.
- Present evidence in your favor and rebut the plaintiff’s evidence during trial.
- File or respond to any post-trial motions.
- Represent you in any appeals.
If you retain your own counsel, make sure the firm is experienced in business litigation as well as in negotiation. Skillful handling of breach-of-contract cases includes making efforts to avoid excessive costs and disruption of business operations, as well as to preserve customer and supplier relationships to the extent possible. These goals are best accomplished if the case is settled out of court. However, the attorney must always be prepared to effectively protect your interests at trial.
Hemmer DeFrank Wessels PLLC is one of Kentucky’s most prominent business law firms, skillfully representing businesses and business owners in breach of contract lawsuits statewide. Contact us online or call 859-344-1188 for an initial consultation in our Fort Mitchell office.