What to do if I'm being sued for breach of contract?
Question Details: I sold my business to an individual and the first 2 payments he made were bad checks and bounced; he made no other payments for over 6 months. The whole time I was still paying for the least equipment in loans on equipment. Then he was evicted from the warehouse for not paying any rent for 6 months, and then I found out he took $95,000 from one of my customers but did not do any work for them. I've been trying to get him to agree to dissolve our agreement and give me back my vehicles and some of the equipment he took from his shop before he was evicted. Now he was suing me for breach of contract? I don't have much money now how do I defend myself? This lawsuit seems very desperate and frivolous.
You defend yourself by first filing an Answer (a written response) to the Complaint (his document initiating the lawsuit)--if you fail to file an Answer in time, you will lose automatically, by default. You then go through the lawsuit: use discovery to get information from him; possibly file motions to dismiss or for summary judgment if you believe there are grounds to throw the case out; ultimately, put on a defense in court, if the case moves all the way to trial (e.g. attack his evidence; put on or present evidence in your favor). Your goal is to show any or all of: 1) you did not breach the contract; 2) he breached or violated it first, since when party A breaches the contract in a material or important way, party B can then treat it as terminated or ended by his breach; 3) he committed fraud (lied to you) to get you to enter into the contract, since fraud can void a contract; and/or 4) he did suffer any losses or damage due to you (since you can only recover compensation for the actual harm you suffered).
You can also countersue him for anything he owes you--such as the payments he was supposed to make under the contract but did not. If he is pulling you into court anyway, there is no reason to put your own claims forward, too.
If you are not comfortable being your own lawyer in what seems like a potentially high-stakes case, hire an attorney to represent you.