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Commercial Litigation Attorneys Houston, TX

4 Reasons to Hire a Commercial Litigation Attorney Instead of Settling

During the course of running your business, you may be involved in a legal dispute with another business or an individual. The stress of a lawsuit can be overwhelming, and the clogged court system is set up to encourage out-of-court settlements. It may seem easier just to settle the dispute instead of hiring an attorney and going to court. There are four important reasons you should hire a commercial litigation attorney instead of settling.

1. Minor Disputes Can Quickly Escalate

In our increasingly litigious culture, something relatively minor can quickly become a larger issue. Unfortunately, if an individual or another business sees an opportunity to ask for more money, change a contract, etc., a previously agreed upon resolution may not be honored. According to Spinlaw, when you hire an attorney, you are establishing your business as one that takes even small matters seriously and won’t easily back down. Every lawsuit, no matter how frivolous it may seem, needs to be taken seriously. It’s important to have an experienced attorney in your corner that can effectively bring the dispute to a resolution as quickly as possible without letting the matter get out of hand.

2. Your Reputation May Be Damaged

You’ve worked hard to earn your reputation while building your business. Negative or untrue information, especially in the age of social media, can quickly damage a hard-earned reputation. Most lawsuits are filed because of economic reasons, not because someone else believes you’re a bad person. The results, however, can prove to be negative for you as well as for your business. An experienced attorney can help handle the information that is allowed to be made public during a legal dispute. If necessary, they can also advise you regarding any action you should take if false claims are made about you or your business.

3. You Need to Spend Time Focusing on Your Business

Trying to manage or settle a dispute on your own can mean putting forth a lot of time and energy. When weeks or even months are spent negotiating a compromise or a settlement, that crucial time is spent away from running your business. Even if you end up with a favorable settlement, your business may have suffered irreparable damage. A qualified attorney knows that during this difficult situation you should focus on what you do best, which is overseeing the day-to day activities of your business. Simply knowing you have an experienced litigation lawyer handling all your legal issues will lessen the stress and help you stay focused on keeping your business as successful as possible.

4. To Protect Your Business and Finances

A legal dispute that’s not handled correctly could ultimately cause you to lose a large amount of what has taken years to accumulate. Settling an issue without the counsel of an attorney could even cause such a financial burden that you may lose your business. Legal terms and documents are often difficult to understand, even for a seasoned businessperson. An experienced commercial litigation lawyer will put the focus on protecting your business interests. Entrepreneur suggests that businesses should retain the services of a qualified attorney even if they aren’t currently facing any legal problems. When a breach of contract, a regulatory dispute, or any other type of business-related legal problem arises, you will already have legal counsel in your corner.

No matter how small a matter may seem, it’s often in the best interest of a business owner to consult a litigation attorney instead of quickly settling. Taylor Law Group specializes in the areas of real estate law, business law, and commercial litigation. They have experience handling the variety of legal disputes that can occur between businesses and individuals. Contact Taylor Law Group for more information regarding your legal situation.

Do Your Invoices Run Afoul of Texas Usury Laws?

Many businesses send out monthly invoices that have language in them about charging interest on past-due balances such as: “1.5% interest on unpaid balance,” or “interest will be charged at 18% on accounts over 30 days,” or something similar. Creditors who add this language to their invoices may be violating the Texas usury laws and may incur serious penalties if the interest is actually charged.

If you don’t have a written agreement with your customer to charge interest, creditors are limited to charging 6% per annum (.5% per month), beginning 30 days after the invoice becomes due. With a written contract, the legal interest rate can be up to 18% per year.

Texas usury laws can be a nasty surprise to businesses because the penalties for violating them are so severe. The creditor can be liable to the debtor for the greater of 1) three times the excessive interest contracted for, charged or received, or 2) $2,000 or 20 percent of the amount of the principal, whichever is less. The penalty is subtracted from the principal amount due, which could result in the creditor actually owing the debtor. It can get worse. If more than twice the legal rate of interest is contracted for, charged, or received, then the creditor can also lose the principal amount of the debt.

Here’s an example of how this might work. You provide $5,000 worth of goods and/or services for a customer without having a written contract agreeing to how much interest you can charge the customer. You send invoices to the customer showing an 18% per annum interest charge for two years before filing suit to collect the balance. The customer files a counter claim alleging usury. The total interest charged is $1,800.00 (.18 x $5,000 x 2 years). the legal interest allowed under the law is $600.00 (.06 x $5,000 x 2 years). Since the interest that you charged is more than twice the legal amount, you can 1) lose the principal amount ($5,000), 2) be liable to the customer for $3,600.00 ($1,800 – $600 = $1,200 excess interest charged, x 3 = $3,600), and 3) be responsible for paying the customer’s attorney’s fees and court costs. This is not what you expected when you filed suit to collect your invoice.

The penalties can apply even if you don’t actually collect any interest payments, but only send invoices showing the charges. I suggest that if you want to charge customers more than 6% per year, you need to get the customer to sign an agreement with a higher interest rate. The agreement doesn’t have to be in any particular form. It can be a work order, estimate, proposal or memo, as long as it sets forth the interest rate to be used, and is signed as agreed to by the customer.

There are ways to get around the usury issue, but the best way is not to charge excessive interest in the first place. This is only a brief overview of a complicated area of the law. If you think that you may have a problem, you should contact an attorney for advice.

Susan J. Taylor is a Houston-based commercial litigation and business law attorney. She began practicing law in Texas in 1985 with a primary concentration in business, real estate, and commercial litigation and bankruptcy. Ms. Taylor is Board Certified in Civil Trial Law by the Texas Board of Legal Specialization. For expert help with commercial litigation or business law issues, please contact The Taylor Law Group for a consultation.

 

 

 

This entry was posted in Commercial Litigation, Contracts and tagged business law, commercial litigation, contract law, contracts, Usury on by admin.