HOUSTON BUSINESS REVIEW

CYA: Famous Last Words...Leading to Litigation.
By Shahara Wright

Shahara D. Wright, Business Law Attorney, "Serving businesses from start-up through expansion". You can cantact her by: calling her at (281) 980-2040, sending her an e-mail or visiting her website. For more information concerning Shahara Wright click here.

Litigation is an issue on the minds of many business owners. Certain matters arise that make litigation inevitable. Here are a few questions that I have received from business owners regarding issues that have lead to litigation:

Our Landlord is not repairing the property as outlined in the contract, we stopped paying rent and now we are going to be evicted. What now? The first mistake was to not pay rent. Most lease agreements prohibit tenants from abating rent for any reason. Now that you have put on notice about eviction, you have two choices. Either to pay the back rent or file for a temporary restraining order (TRO). The TRO will put you immediately in litigation and will be costly. However, even if you pay the back rent, you may need to file a lawsuit to force the landlord to make the necessary repairs and/or repay you for them. Getting your attorney involved early in the conflict may help to resolve many issues before litigation arises.

I had a valid contract with A&Z Company; they now want to cancel the contract. What can I do? Depends on the contract. Your contract should outline your remedies for you. Generally, you have to give the breaching company notice. Meaning, that you need to send them a certified letter outlining the breach and giving them a certain amount of time to fix the problem. If they refuse, then you have a choice to litigate or let it go. While many will want to sue, the cost can be enormous. Be ready to spend several thousand dollars. Make sure that you keep clear records of the conversations that you have had with the breaching company regarding the contract. Documentation is important and is invaluable when substantiating your claim.

I have a partnership and my partner is pushing me out, what are my options? Again, what does the contract say? Partnerships, while easy to form are difficult to get out of. Both of you must agree to dissolve the partnership and if you do not, litigation may become necessary. If the agreement does not address withdrawal, you must use the courts to dissolve the partnership. You must be sure that you have the necessary documentation showing your interest in the partnership, as well as the partnership assets and liabilities. Make sure that at all times, you have access to the information regarding the partnership contracts and financial statements to protect your interests.

Nothing in this article is intended as legal advice and you should consult an attorney before making any decisions.