You bet you can. Just watch. These brawls are just like my business brawls writ small. So, after watching some of the small claims court (General District Court in Virginia) cases involving credit cards, this is what I’ve learned.
First, is there a contract? Well, the easy way is to keep a copy of the signed contract. If you are not keeping copies of your contracts (signed by the other side of course) you have a problem. And an “example” contract is not adequate. You need the actual contract. (I’ve run into this with disputes over internet domains among other things.)
Note: Credit cards seem to have a provision in their contract that “use of the card constitutes acceptance.” But then they have the problem of proving that the debtor actually “used” the card because they do not have a signed credit card slip or something to show that the debtor actually used the card. They do show an amount owed, but that doesn’t prove that the debtor used the card. It just proves that someone is charging the debtor a fee.
If you don’t have the actual contract, you have several problems:
Problem number 1 is “how to show that there is a contract?” Is there a written contract? If not, can you show that you made an offer, that the other side accepted the offer, and that you did something you would not otherwise have done (what lawyers call “consideration.”) If you can show all 3 of these things, you can show that there was an oral contract.
Problem number 2 is “what are the terms of the contract?” A written contract will have terms and conditions. If there is no written contract, what do you do about late payments, interest fees, etc. etc.? The answer is that you cannot. If there are no terms, you are stuck. The same is true about delivery dates. When is the other side supposed to perform their obligations? Without a written contract, it’s hard to know. Soon, yes, but how soon? Who pays first? How much up front?
Problem number 3 is “If you cannot show that there is a contract, do you have to give up?” No, you do not. If you have paid the other side money and they didn’t live up to their obligation, you can sue for what lawyers call “unjust enrichment,” which is just what it sounds like.
Problem number 4 is “Do you have standing to sue?” More to the point, do they have standing to sue you? “What’s this mean?” you say. Well, if the contract has been sold or taken over by another company (or debt collector) how can they show that they now own the contract? This is not always easy unless there are detailed written records. Lots of times there are none. Without records, a 3rd party cannot collect.
Problem number 5 is “How much is owed?” This has a bunch of subsidiary questions: What is the base amount? What is the rate of interest charged? Are there penalties? What about collection fees and costs? If you don’t know, you don’t get any.
Problem number 6 is “Has your right to sue expired?” In VA, MD and D.C., the statute of limitations on a written contract is 5 years. But the statute of limitations on an oral contract is only 3 years. So, how long ago did all this happen? If you don’t know, you have a big problem.
