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Ten Things to Think About: Before You Sue

People involved in disputes often rush to judgment and decide to sue. Here are some things to think about before deciding to start a lawsuit to settle your dispute.

  1. Do you have a good case? This may seem obvious, but you need to have a cause of action for your claim. You have to understand what all of the elements of your claim are. For example, for a claim of "breach of contract," you need to establish the following elements: (1) a contract; (2) performance due under the contract; (3) breach of the contract; and (4) damages. An attorney can help you determine if a cause of action is present based on your facts.
  2. Have you demanded payment in connection with your dispute? This step also seems obvious, but is often overlooked by plaintiffs in their rush to the courthouse. If they know they owe and are able to pay, most businesses will pay rather than be dragged into court-just ask them.
  3. Have you tried to settle the dispute by compromise? Take a realistic look at the other party's point of view. Perhaps he or she has a valid defense or claim against you. Maybe some of the goods you delivered were defective. Adjust your claim accordingly. Also, you may want to think about reducing the amount you are asking for. From a purely practical point of view, you may receive more that way than you would suing because you will have to pay attorneys' fees and other costs in connection with the lawsuit.
  4. Will you be able to collect the judgment if you win? Take a hard look at the financial condition of the party you are going to sue. You want to be reasonably certain that you will be able to collect a judgment before you spend a lot of money on a lawsuit!
  5. Do you have the money to pay a lawyer to handle the lawsuit? Lawsuits are expensive, and recovering your attorneys' fees is, most often, not an option. Ask your lawyer for an estimate of legal fees, and then determine how far you are willing to take your case based on the wanted outcome. It is often much cheaper to settle.
  6. Do you have the time and resources to devote to a lawsuit? Lawsuits take a lot of time and energy, and can be emotionally draining. Remember that you and your employees will have less time and energy to devote to your business for the duration of the lawsuit.
  7. Are you within the applicable statute of limitation? Check with your lawyer to make sure that any time periods have not run.
  8. Where will you be able to sue? If you are suing someone from a different state, a court in your state may not have personal jurisdiction over the defendant. In that case, you might have to sue the defendant in his or her location, which will probably be more expensive and inconvenient for you.
  9. Is your claim small enough to bring in small claims or conciliation court? If so, you will usually be able to represent yourself, if you wish.
  10. If you bring your claim in small claims or conciliation court, will you represent yourself? You will save attorney fees by doing so. However, you may wish to pay an attorney to coach or advise you how to prepare your case.

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