On this week’s #TuesdayTips article, ERA Law Group, LLC wants to help business owners prevent collection nightmares. It’s frustrating when you provide a service, send an invoice, and never receive payment. As a business owner, you want to ensure your efforts to collect don’t exceed the amount you’re collecting. There are many options to collect outstanding debts and even more ways to prevent a collection nightmare.
First, if you don’t have a contract, you need one. Contracts are the heart of your relationship with your customer. There are certain provisions you’ll want to ensure are in your contract to make it enforceable in Court. For example, your contract should permit several legal remedies upon breach by the customer, a provision for attorney fees in the event of breach, interest for late or non-payment, etc. Second, ensure that you have the necessary and required licenses. For example, contractors cannot enforce contracts against homeowners if they are not properly licensed with the Maryland Home Improvement Commission. Third, do not begin any work until you have a signed contract. If you have any amendments or change orders, get them signed. With email, text messaging, scanning, etc., there’s no reason not to have a fully executed agreement within minutes.
If you have a contract and your customer hasn’t paid there are many legal remedies available. For example, if the customer has made any payment by check, you can garnish their bank account. You can sue for breach of contract and in some cases even get your attorney fees. If a check bounced, you can collect a fee and sue for additional fees.
Don’t forget, a Maryland corporation must be represented by an attorney in both District and Circuit Court! Call ERA Law Group, LLC today at (443) 906-3566 and ask us how we can help you!