Small claims court can be very useful for small business owners. If you need to collect on a long overdue bill, you can file a claim and get what you’re owned without having to fork over half your cash to a lawyer. However, if you find yourself being the defendant in a small claims case, the sword of justice could give your company a devastating blow. As this article points out, small claims court dollar limits range from $2,500 to $25,000. Here are a few tips on how to survive small claims court.
Get everything in writing
Let’s say you’ve contracted a local independent signage company to outfit your business with one new main sign and two pylon signs. According to this Forbes article, that’ll run you about $4,500. Three weeks after your agreed upon due date, a company representative shows up at your shop with a sign that’s the wrong color, the wrong size and with the name of your business spelled incorrectly. You, of course, refuse to pay and two weeks later you receive a court summons.
The owner of the signage company is suing you for the fee and they have a contract spelling out the terms of the agreement. So how do you prevail in this instance? First of all, make sure that the contract you signed specifies the size, color and lettering of your sign and that if those specifications aren’t met, you’re off the hook. The devil is in the details.
Get a witness
Here’s how to handle a small claims case brought by a disgruntled customer. Let’s say you own an electronics repair shop and a customer comes in with a smartphone that has a shattered screen. You look over the phone and determine that you can fix the screen. The customer agrees to your terms and is very happy with their repaired mobile device. A week after you’ve given the customer their phone back, the customer returns to your shop irate because their device’s home button no longer works. You inspect the phone and determine that your work didn’t cause the phone’s new malfunction.
A few weeks later the customer sues you for the MSRP value of the phone, $750. One way to handle this situation is to contact a third party electronics expert and have them review your work. If they find that you didn’t cause the new glitch, they can testify that you were not at fault. If the expert finds that you are at fault, they can explain that most mobile devices lose half their value the second they become activated. Expert testimony will go a long way in convincing a judge that the plaintiff has no case.
This article was written by Mario McKellop for Small Business Pulse