Q: What is the best recourse after a client breaches contract with our company?
Their business is potentially going under which is why they have defaulted.
The obvious first thoughts are to file a lawsuit.
Are there other easier alternatives to filing a lawsuit such as possibly filing a lien on the commercial property or possibly filing a claim with either our commercial insurance or the clients insurance policies?
Background: We are a commercial cleaning company who charges a monthly service fee for our services. Our client has a 1 year agreement with us however they have defaulted and are not able to pay us.
A:
Basic maintenance and janitorial services are not the type of service that give rise to potential lien rights under Texas law. The cleaning of construction debris might.
I can't think of a type of insurance policy that is likely to cover a failure to pay for services breach of contract claim. I would have to see the policy that you think you might have a claim under to be certain.
I think you are left with a straightforward breach of contract claim. If the amount is large enough that you have to retain a lawyer (over $20,000), you should be entitled to a judgment awarding you attorney fees as well as the amount owed. But if the business is likely to go under, there may not be any non-exempt assets available to satisfy any judgment you may win.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
