Madison Small Business / B2B Disputes Demand Letter

Yes, businesses can sue other businesses in Dane County Small Claims Court for claims up to $10,000. Either the business owner can appear personally, or in Wisconsin, a business can be represented by an employee or officer who is not an attorney. The small claims process is designed to be accessible without legal training, though you should thoroughly prepare your evidence. Filing fees range from $94.50 to $164.50 depending on the amount claimed. For disputes over $10,000 or complex legal issues, Circuit Court is the appropriate venue, and attorney representation is strongly recommended.

First, document the work you performed with photos, records, and any written approvals from the customer. Review your contract for dispute resolution procedures, warranties, and cure periods. Contact the customer to understand their specific concerns and offer to address legitimate issues. If the dispute continues, send a formal demand letter clearly stating what was contracted, what was delivered, and requiring payment or specific identification of claimed defects. Consider mediation to resolve disputes while preserving the business relationship. If still unresolved, you may need to pursue legal action while the customer may file a counterclaim, so ensure your work was performed properly.

Collection becomes more difficult when a business closes. If the business was a sole proprietorship, the owner remains personally liable and you can pursue them individually. For LLCs and corporations, the business entity may have been the only liable party, making collection harder. However, check whether owners personally guaranteed debts, which is common for small business credit. If assets were improperly transferred or the business was undercapitalized, you may be able to pierce the corporate veil in some circumstances. File your claim and judgment quickly before assets disappear. In bankruptcy situations, file a proof of claim to potentially receive some distribution.

Partnership disputes are governed by your partnership agreement and Wisconsin Chapter 178 (or Chapter 183 for LLCs). Review your governing documents for dispute resolution procedures, buyout provisions, and remedies. Common options include: enforcing the agreement through court action, seeking an accounting of partnership affairs, pursuing dissolution of the partnership, or negotiating a buyout. Partnership disputes often involve complex fiduciary duty issues, so consulting with a business attorney is advisable. Mediation is often effective for partnership disputes because the parties must continue working together or agree on separation terms.

Under Wisconsin's adoption of the UCC (Chapter 402), you have significant rights when goods do not conform to the contract. You can reject non-conforming goods within a reasonable time after delivery and notify the seller of the defects. If you accepted goods before discovering defects, you can revoke acceptance if the defect substantially impairs value. You may pursue damages including the difference between value of goods received vs. goods promised, consequential damages if they were foreseeable, and incidental costs like inspection and storage. You can also 'cover' by purchasing substitute goods elsewhere and recover the price difference from the breaching seller.

Yes, but the right to charge interest and fees depends on your agreement with the customer. If your contract or invoice terms specify interest rates and late fees, those rates are generally enforceable (within usury limits). Include interest and fee language on your invoices and contracts before problems arise - it's harder to impose after the fact. If no rate is specified, Wisconsin allows prejudgment interest at 5% per year (Statute 138.04) on liquidated (fixed amount) claims. Many businesses include language like 'Accounts not paid within 30 days subject to 1.5% monthly finance charge.' Attorney's fees are only recoverable if your contract provides for them or a statute authorizes it.

A mechanic's lien is a powerful collection tool for businesses providing construction labor or materials. It creates a security interest in the improved property, meaning you can potentially foreclose on the property to satisfy your debt - even if you contracted with a general contractor rather than the owner. In Wisconsin, strict procedures must be followed: subcontractors must provide notice within 60 days of first furnishing labor/materials, the lien claim must be filed within 6 months of last work, and foreclosure must commence within 2 years. Missing any deadline loses your lien rights. Because of these strict requirements, consult with an attorney experienced in construction law if you have significant receivables in this industry.

The statute of limitations for contract claims in Wisconsin is 6 years from the date of breach. For contracts involving the sale of goods under the UCC, the period is 4 years from breach, though contracts can reduce this to as little as 1 year. The clock generally starts when the breach occurs, not when you discover it - though for fraud, the discovery rule may apply. Do not wait until the last minute to file; evidence becomes harder to gather, witnesses' memories fade, and businesses may close or relocate. Filing promptly also demonstrates the seriousness of your claim and may motivate settlement.

Credit card chargebacks can be fought, but you must respond promptly with documentation. When notified of a chargeback, provide your payment processor with: the signed contract or authorization, proof of service delivery or completion, any communications showing customer satisfaction or acceptance, your terms of service, and any other documentation supporting the legitimacy of the charge. Response deadlines are typically 7-14 days, so act quickly. If the chargeback is upheld by the card company, you still have the right to pursue the customer directly through demand letters and court action. Maintain good records and written agreements to defend against chargebacks.

It depends on the amount, age, and circumstances. For fresh debts under 90 days, pursue collection yourself through demand letters and direct contact - you have better knowledge of the situation and maintain control. For older debts or when internal efforts fail, collection agencies offer several advantages: they are experienced in collection tactics, they free up your time to run your business, and they provide some recovery on debts you might otherwise write off. Collection agencies typically charge 25-50% of amounts collected. For substantial amounts with clearly solvent debtors, consider whether direct legal action might be more cost-effective than agency fees. Some businesses use agencies for smaller amounts and attorneys for larger ones.