A business contract is a legally binding agreement between two or more parties—and when the terms of that agreement are broken, it’s well within your rights to take action. The law allows for a robust contract enforcement process, including mechanisms to help you and your business collect on outstanding debts. Given the legal complexities of these processes, it’s important to seek an attorney’s advice early and often. Working with a creditor’s rights attorney can help you ensure that you’re paid what you are owed, and that the terms of your business contracts are fully complied with.
Mechanisms for Enforcing Contractual Rights
Filing a lawsuit in state or federal court is perhaps the most familiar method for enforcing a contract, but it’s not the only way to do so. In fact, many contracts will specify alternative arrangements for enforcing the agreement, including private arbitration or mediation. In arbitration, the outcome of the proceeding can be binding on the parties. With few exceptions, courts reliably confirm arbitration awards through a streamlined petition process, transforming the arbitration award into a bona fide court judgment. Mediation, on the other hand, is a non-binding, voluntary dispute resolution process assisted by a skilled mediator, often a retired judge. Unlike a civil lawsuit, arbitration and mediation are private services that are not required to be open to the public. As a result, the parties must agree to using these private services, either before a dispute arises (often in the contract itself), or after.
While there is no one-size-fits-all answer to selecting an appropriate enforcement process, an experienced attorney can help you to identify the most efficient and effective path forward, given your goals and circumstances, and what terms or provisions will most incentivize compliance in the first place.
Seek Legal Advice Early and Often
Regardless of which enforcement process(es) best fits your business needs, there are several contractual provisions that skilled litigators routinely rely on to secure the most efficient, cost-effective recovery for their clients. Such provisions may include requiring mediation or arbitration instead of (or in addition to) filing a lawsuit; requiring a party that breaches a contract to pay the other side’s attorneys’ fees; specifying where a lawsuit, mediation, or arbitration must take place and who will serve as the arbitrator or mediator; specifying what law will apply to the contract; requiring one or more parties to provide collateral as security for the debts owed under the agreement; and providing that a prevailing party in any dispute shall be entitled to liquidated damages for losses that, by their nature, are too difficult to calculate, among many other provisions.
Deciding whether to adopt any or all of these provisions, including whether arbitration or mediation should be required, depends on the circumstances. This is why it’s important to consult an attorney early, before a problem arises and even before a contract is entered into. Given the shifting nature of the law, the resources available to the courts, and multidimensional analysis of how best to pursue collection on a debt, you and your business should continually reevaluate what makes the most sense given your current circumstances and goals, and update your contracts as those circumstances and goals change over time.
Methods for Collecting Outstanding Debts
In some instances, obtaining a court-issued money judgment may be the only viable option for you to collect on an outstanding debt. Fortunately, once you’ve obtained a judgment, there are a variety of methods available for you or your business to collect on the debt, including: debtor’s examinations to identify the debtor’s assets and financial accounts; judgment liens on real property; wage garnishment; and requisition of the debtor’s personal assets. Navigating these processes can be complicated and may result in varying degrees of success. Attorneys familiar with debt collection can expeditiously identify the debtor’s assets and income, and help you determine the most efficient way to collect on the debt.
Hiring a Creditor’s Rights Attorney
Dhillon Law Group is highly competent and effective at defending creditors’ rights in California. Our legal services include commercial debt collection and handling commercial claims through negotiation, mediation, arbitration, and litigation. It’s our job to ensure that our commercial clients are paid in full, and that the terms of business agreements are upheld, to our clients’ advantage. When contracts are breached, we help clients take the necessary actions to make things right as quickly as possible.
Dhillon Law Group represents business clients in the collection of commercial claims and enforcement of their rights as creditors. We possess the experience to assist clients in industries including computer technology, onsite project consulting, distribution and sale of goods, advertising, construction, manufacturing, telecommunications, and transportation. Our ability to deliver efficient and cost effective legal services sets us apart from alternative options available to creditors. Unlike some other law firms or collection agencies, Dhillon Law Group possesses the professional resources and legal expertise to fully litigate a collection claim to assure that our clients achieve the maximum recovery available.
If you need a lawyer to champion the rights of your business, we invite you to contact Dhillon Law Group—a top commercial litigation firm, with offices in California as well as New York. Reach out to us today to schedule a consultation with one of our commercial claims attorneys.