As an attorney who represents small business owners, much of my work is keeping my clients out of court. I would rather assist a client with preventative measures, so that my client does not need to sue, or get sued in court. However, many small businesses do end up in court. Suits for breach of contract are very common, and many small businesses either end up suing for breach of contract because the small business is owed money, or the small business ends up getting sued for breach of contract, because another business believes the small business owes it money.
There are many things you should do to protect yourself if you're a small business owner, if you believe that someone has breached your contract, or if your small business gets sued over breach of contract. But there is one thing you cannot do, and that is represent your small business in court. This may sound counter-intuitive, because as an individual person, you can represent yourself pro se. Nothing in Oklahoma law prevents you from representing yourself in a civil case. But why can't you represent your small business? First of all, if you're an attorney, then you can represent your small business. However, most small business owners are not attorneys. There is a 1989 case, Massongill v. McDevitt, in which the Oklahoma Court of Civil Appeals held that “although a party to an action may appear pro se, he is not entitled to appear for or on behalf of a corporation, regardless of his interest in it or any authorization which he may have from the corporation.” What this case means is that unless you happen to be an attorney, you cannot represent your small business in court. I have personally observed how judges handle this situation in Oklahoma. I have appeared on dockets where a corporate officer, perhaps the president of the company, comes to represent a corporation who is the plaintiff in the case, and the court dismisses the case because the corporation is not represented by an attorney. Further, I've been on another docket where the judge threatened a default judgment against an LLC defendant who was not represented by an attorney. The court did enter a scheduling order, but insisted the defendant obtain counsel by pre-trial. The key here is that unless you're an attorney, you cannot represent your small business in court.
Now that I've broken the bad news, what else can you do to protect your business, especially if you believe a client owes your small business money? First, you should make sure you're properly invoicing your client. Although you might usually invoice your clients via regular mail, send the invoice via certified mail, return receipt requested, in addition to calling and/or e-mailing your client to ask about the unpaid bill.
Second, consider the cost versus the benefits of collecting on an unpaid invoice. If you decide to hire a lawyer, the costs of legal fees might outweigh what you are owed. Also, even if you do hire a lawyer and sue to recover unpaid funds, there is no guarantee that you will get the money back. You may get a judgment, but then you will need to collect on that judgment, and you may not get your money back.
Lastly, if a written contract was involved in the transaction, make sure you understand the contract. Many small business owners sign contracts which they do not understand, and then get themselves into trouble not honoring the contract because they simply did not understand it. If you are presented a contract by a vendor, or another party, and you do not understand the contract, that is a good time to hire an attorney to review the contract and help you understand your obligations.
At Liberty Legal Solutions, LLC, we provide contract and document review services for our clients for a simple, flat fee. We will review most contracts for $250.00 per contract or document and provide appropriate advice. An ounce of prevention is worth a pound of cure. Also, if you have a small business and have any legal questions, are looking to grow, or maybe you're interested in starting a small business, please contact me at [email protected] to schedule a free consultation. For more information about Liberty Legal Solutions, LLC, please visit our website http://www.libertylegalok.com/