By Charles E. “Buzz” English, Jr.
Has this happened to you…
You sold the goods or provided the services. The client or customer never questioned the bill or raised any quality issues. You’re not making an abnormally large profit on this transaction… you just are just looking to get paid so that you can pay your bills. Normally, if a customer does not pay, you would consider pursuing legal action.
But, as we are all well aware, we are in the midst of a pandemic. Unemployment is at the highest level of modern times. The latest estimate is that as many as 30,000,000 people are unemployed. Some businesses have been ordered to close down and others cannot operate because of public health issues. We may be facing a depression. But alas, a few businesses have received loans through the Small Business Administration while others may have received grants… which raises the question: is a customer not paying because it does not have the money or because it is holding on to its cash?
What should you do? How can you get paid? How long will this last? What are your options?
These are questions that every businessperson in this situation is pondering. If any lawyer could answer these questions with 100% accuracy, we would be picking stocks rather than practicing law, but not all situations are the same. Each claim must be reviewed and analyzed based upon the facts of the specific transaction.
Nonetheless, after 37 years of practicing law and representing clients in the ups and downs of business cycles, there are a few tips I would suggest every business consider in today’s uncertain times:
- Know the terms of the purchase order and invoice. Almost every purchase order or invoice has small print on the back or at the bottom of the form. Most of the time we ignore these terms until a dispute arises. You should take the time to understand what these terms mean and know the conditions under which the purchase was made.
- Document. Document. Document. Make sure your business can document that it has performed its duties as stated in the agreement. Confirm all agreements, modifications, and conversations with an email. A good practice is to send a follow-up email to a telephone conference that begins with, “This is to confirm our conversation that…” And keep your documents. All of them.
- The concepts of Force Majeure, impossibility, and other contractual performance issues will dominate business litigation. Make sure you understand these concepts and whether the concepts apply to your situation.
- The wheels of justice turn slowly – and even more slowly now. Courts have basically been shut down except for emergencies for three months. When judges do start hearing cases, backlogs, delays, and slow-moving dockets will be a reality of life. Be prepared that nothing will happen as soon as you or your lawyer wants it to.
- Cash is king. A bird in the hand is worth two in the bush. I know these are clichés, but sometimes it is better to put a problem to bed rather than dragging it out for months of uncertainty.
- Business disputes are best resolved by business people. When you go to court, a judge or jury will decide your case. Most of the time, these decision-makers are not business people. The decision will be made based upon the law and facts as the court or jury interprets them, not as you know them. Sometimes these decisions are not in either party’s best interest.
In every case, at ELPO Law we represent our clients to achieve the best possible results based upon our years of experience and the strength that comes with having a large team on your side. Before you make important decisions, talk with us so that we can help you understand all of your options and put your business in a better position to achieve the best outcome. Our attorneys are available to meet in person at our office starting May 11th and virtually anytime. Call 270-781-6500 to find out more about how you can protect your business even during COVID-19.