1. What Should a Business Check before Filing Suit?
An unpaid invoice may reflect a buyer's refusal to pay for work it considers defective. Before filing, compare what each side promised with the performance records. The key question is which obligation was breached and what loss followed.
Match Contract Terms to the Disputed Conduct
Identify the agreement, the performance due, and any condition or excuse that may affect liability. The date discussions broke down may differ from the date the claim accrued.
- Collect signed agreements, amendments, purchase orders, and schedules.
- Match invoices and payments to delivery and acceptance records.
- Calculate losses and account for disputed credits or offsets.
Some transactions raise claims beyond breach of contract, including issues addressed in complex commercial litigation.
Check Available Remedies and Limitation Periods
CPLR 213(2) generally provides six years for contract claims. Sales-of-goods claims and certain other claims may have shorter periods, so check the governing law and accrual date.
- Identify the breach date and any applicable shorter deadline.
- Review liability caps, exclusions, and contractual cure rights.
- Support claimed damages with records rather than forecasts alone.
2. Which Contract Clauses Affect the Dispute Route?
A contract can dictate what notice must precede a lawsuit and where the parties must resolve their disagreement. Read the clauses together, including exceptions. An arbitration provision may bring the Federal Arbitration Act into play, while state law governs many underlying contract questions.
Distinguish Governing Law, Forum, and Arbitration
Choice of law concerns the substantive rules; forum selection concerns the chosen court or location. An enforceable arbitration clause may require covered claims to proceed outside court.
| Clause | Question before Filing |
|---|---|
| Choice of law | Which substantive law applies? |
| Forum selection | Where must the dispute be heard? |
| Arbitration | Which claims fall within the agreement? |
| Notice and cure | What must occur before proceedings? |
Choice of law
- Question before FilingWhich substantive law applies?
Forum selection
- Question before FilingWhere must the dispute be heard?
Arbitration
- Question before FilingWhich claims fall within the agreement?
Notice and cure
- Question before FilingWhat must occur before proceedings?
The scope and enforceability of arbitration provisions require a separate review.
Follow Notice and Cure Requirements
An informal email may not satisfy a clause requiring delivery to a designated address. A missed cure opportunity can complicate a claim even when the alleged breach is documented.
- Check the recipient, delivery method, and stated period.
- Retain proof of delivery and the other party's response.
- Document negotiated extensions without changing original records.
3. Which Court Can Hear a Commercial Dispute?
Supreme Court hears qualifying civil disputes in both counties, but Commercial Division assignment has separate requirements. The counties use different monetary thresholds. Proper venue, claim type, and assignment papers matter alongside the amount sought.
Compare Commercial Division Eligibility
Under 22 NYCRR 202.70, the general threshold is $200,000 in Nassau County and $100,000 in Suffolk County. Rule-specific exceptions apply; punitive damages, interest, costs, and attorney fees do not count.
- Determine proper venue and whether the principal claims qualify.
- Review claim value, equitable relief, and any rule-based exception.
- Prepare an RJI with the Commercial Division Addendum when seeking assignment.
An RJI and Commercial Division Addendum generally must be filed within 90 days after complaint service; transfer exceptions may apply.
Check Electronic Filing and Federal Jurisdiction
Nassau generally requires NYSCEF in newly commenced Supreme Court actions, subject to exceptions. Suffolk mandates e-filing for Commercial Division matters. Federal jurisdiction requires a separate basis.
- Check the applicable county protocol before starting the action.
- Confirm subject-matter jurisdiction, venue, and service rules.
- Keep filing receipts and copies of served papers.
For diversity jurisdiction, check complete diversity and the amount in controversy; a contract dispute alone creates no federal question.
4. How Should Management Prepare Its Response?
Business decisions often cannot wait for a lawsuit to end. Identify which documents matter, who holds them, and whether operations face an immediate risk. Preservation and settlement discussions can proceed while the company assesses its legal position.
Preserve a Reliable Transaction Record
A dated sequence of messages can show when work changed, payment stopped, or objections began. Preserve source files before reconstructing events through employee interviews.
- Collect contract versions, emails, ledgers, and meeting notes.
- Identify custodians and preserve relevant electronic communications.
- Review privilege before circulating attorney communications.
Consider Settlement and Temporary Relief
Negotiation may resolve a pricing or performance disagreement without trial. Under CPLR 6301, a preliminary injunction may be considered when the required legal standards are met; monetary loss alone generally does not establish irreparable harm.
- Compare likely costs, commercial impact, and litigation risks.
- Define what a proposed settlement would actually resolve.
- Assess threatened harm before requesting interim court relief.
Preliminary injunctions require analysis distinct from an ordinary damages claim.
5. Frequently Asked Questions
Can a business sue without a signed written contract?
Sometimes. Communications and conduct may establish an agreement, although certain contracts must satisfy writing requirements under applicable law.
Can a company recover attorney fees after winning?
Not automatically. Recovery generally depends on an enforceable contract provision, statute, or another recognized legal basis.
Does dissolving a company end a pending lawsuit?
No. Dissolution does not necessarily eliminate existing claims or liabilities. The entity's status and governing law matter.
Can an owner be personally liable for a company's contract?
Not solely because of ownership. A personal guarantee or another recognized basis for liability may change the result.
6. Review Business Dispute Documents with SJKP
A notice clause or missing delivery record can alter the next procedural step. SJKP's attorneys can review agreements, transaction evidence, filing options, and disputed claims with company decision-makers. Contact SJKP to discuss the documents and legal questions requiring review.
22 Oct, 2026
