Small claims court provides a simple tool for business owners to handle more minor cases. To use this system, the claims must be less than a certain amount, and this court does not allow lawyers during the hearing. Such a simplified proceeding can help business owners do things such as collect on unpaid invoices.

Small claims court offers a simplified tool for business owners to handle cases.

Small claims court offers a simplified tool for business owners to handle cases. Photo by Markus Spiske on Unsplash

Small Claims Court Offers Simplified Tools For Resolving Disputes

The legal system uses small claims court to handle smaller legal disputes. Typically, small claims court handles disputes up to a few thousand dollars (note that the amount differs from court to court – check your local jurisdiction for the limit). Judges handle these disputes often within a day or two. This differs from the traditional court, where proceedings can drag on for months and years.

Small claims court provides a tool for small businesses to handle legal matters such as getting an overdue bill paid.

Businesses routinely use small claims court to collect on overdue invoices. The speed and efficiency of the process means that cases that are too small for regular courts have a means of being resolved.

Understand The Requirements of Small Claims Court

Small claims court imposes limits on the size of claims it handles. The court generally handles claims of a few thousand dollars – in some places, up to $10,000. That means that if you have a demand higher than that amount, you would not be able to use small claims court.

Additionally, small claims court generally does not allow lawyers (however, many small claims courts do allow lawyers on appeal). While this may simplify proceedings, it does mean that the parties take on more of the burden of representing themselves on their court day. Do know that you can have an attorney advise you on your small claims case, you can’t bring them into court with you.

Prepare Yourself For Small Claims Court

As with any legal proceeding, one needs to prepare. At a minimum, that means having proper evidence to support your claim. Evidence for a breach of contract claim might include the contract itself or some other communication showing that the parties made a deal. The proper evidence varies from case to case.

Prepare for court by thinking ahead. For many businesses, that means having a properly-drafted contract. If it comes time to take the matter to court, this contract provides a handy tool.

Business owners prepare for court by speaking with an attorney well before a dispute occurs. This way, business owners learn strategies to both avoid conflicts and to make sure that they have a plan if a disagreement arises.

Business owners should also make themselves aware of the particular monetary limits of small claims court in their area.

Understand The Alternatives

Small claims court is not the right choice for every situation.

Not every case can be decided in small claims court, and if the value of the matter is too high, the court would not hear it. Certain types of cases may not be heard in small claims court, regardless of the value.

Additionally, the court may not always be the right tool. In many cases, parties can resolve disputes collaboratively by being flexible. Consult with an attorney before filing any legal claim.

Let me repeat that final point and expand on it: before filing a legal claim, whether in small claims court or elsewhere, seek proper legal counsel. Getting specific details wrong can jeopardize your claim and leave you with nothing. 

PS – did you know that in 2022 the United States started a copyright small claims court? It’s a tool to help creators get quickly relief when their work gets copied.

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