Stiffed. Cheated. Ripped off. Abused. Exploited. Those are some of the ways business people might describe the way they feel when they deliver goods and services on time but never receive payment.
Fortunately, Texas law provides an understandable and efficient way for you to pursue the debtor. The procedural device is called a “suit on a sworn account.” For decades it has aided countless businesses and individuals to get what they’re contractually due.
To be successful in this procedure, one must establish the following:
1. You sold goods or furnished services to someone;
2. The prices you charged were just and true (per your contract or customary in your industry);
3. You have a detailed record of the transaction;
4. You gave the debtor credit for all payments;
5. Despite number 4, you are still owed easily provable money; and
6. You sign a verification that all of the above is true.
As you can see, it is easy to establish a sworn account and it’s affordable. You can even recover attorney fees in your lawsuit! However, it’s important to know that if you are owed money on such an account, you have four (4) years to start a lawsuit against the debtor or you will be forever barred in taking action to get your money.
Bottom Line: I suggest you do what I call “paper the file.” This means that when you are owed money, after keeping your written contract – write down and maintain every communication you have with the debtor; importantly, in an e-mail, ask them to acknowledge that they received your goods or services and they do not have any problem with them. This is key.
There are a few more issues in these situations, but establishing a sworn account should help protect you. Especially if you always begin your business transactions with a written contract before you deliver the goods or services.
How Mark A. Alexander, P.C. Can Help You in Business Ownership and Governance Matters
If you want to learn more about Business Law or how to protect your business in ownership and governance matters in Texas, contact Mark Alexander today. Mark is active in the Dallas business community. He has represented hundreds of business clients all over Texas on a wide variety of business issues. He can help you address the issues that matter to you.