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What to do if someone sues your business for breach of contract

On Behalf of | Jan 3, 2023 | Business

Running a business has so many built-in struggles. Regrettably, a lawsuit for breach of contract is a real possibility that can add to your burden.

Such a suit may come from an employee, vendor, customer or another company if the entity believes your company did not fulfill the terms of an agreement. The costs of losing a case can be devastating, so knowing what to do could protect you.

Review the summons carefully

After receiving a summons, review the information carefully and thoroughly. Compare the claim with the clauses and stipulations of the contract to decipher if any errors or inaccuracies may be present in the paperwork. Such discrepancies may allow you to dismiss the lawsuit altogether.

Pay attention to any deadlines for responding. In Kentucky, the timeframe is 20 days after the service of the summons.

Do not contact the plaintiff or initiate any communication, as the person could use something you say against you in court. The plaintiff may try to offer another resolution, but this could be a setup meant to incriminate your business.

Consider putting a litigation hold in place to ensure you preserve and compile necessary data related to the case. Do not forget any seemingly small pieces of information. If your company has a routine process for deleting old recordings, emails and other communications, halt this practice while you collect evidence.

Talk to your insurance company

You may have coverage through an insurance policy to help with such a case. This coverage can include attorney fees, court costs and settlement amounts in case of a loss.

Lawsuits are often a cost of doing business. Taking the proper steps may keep you from making the situation more challenging.