Sued by a Supplier for Unpaid Invoices?
A vendor, distributor, or service company has sued your business for invoices it says were never paid. Here is what these cases usually turn on in New York, and what to do before your answer is due.
Tell Me About the CaseWhat These Lawsuits Look Like.
Supplier suits are among the most common business cases filed in New York Supreme Court. Food distributors, medical and dental supply companies, building material yards, freight carriers, staffing agencies, and security companies sue customers every week over open balances. The complaint usually claims breach of contract and account stated, and it often attaches the credit application your business signed when it opened the account.
Read that credit application closely. Many contain a personal guarantee, a clause choosing a New York court, an interest rate, and a promise to pay the supplier's attorneys' fees. If you signed a guarantee, you may be named personally as well. See sued on a personal guarantee.
The Deadline Comes First.
Your business has a short window to answer, and a corporation cannot answer on its own. CPLR 321(a) requires a corporation to appear through an attorney. If no answer is filed, the supplier can ask for a default judgment for the full amount claimed, plus interest and fees. See what to do when your business is sued.
What These Cases Usually Turn On.
An itemized claim needs an itemized answer.
When a supplier sues over goods sold and delivered or services performed, CPLR 3016(f) lets it list and number each item in a verified complaint, with the agreed price or reasonable value of each. Your verified answer must then indicate specifically which items you dispute, and whether the dispute is about delivery or performance, value, or price. A general denial is not the answer this rule calls for.
Invoices you kept without objecting.
Suppliers almost always add a claim for account stated, which rests on the idea that you received the invoices and kept them without objecting. Emails or letters disputing a bill, sent when the bill arrived, can make the difference. Find them before anything else.
Short, late, or defective goods.
For a sale of goods, the Uniform Commercial Code applies. Under UCC 2-607(3)(a), a buyer who has accepted goods must notify the seller of a breach within a reasonable time after discovering it, or lose its remedies. Under UCC 2-717, a buyer that notifies the seller may deduct its damages from the part of the price still due under the same contract. What you told the supplier, and when, matters.
How old the claim is.
A claim for breach of a contract for the sale of goods must be brought within four years after the breach under UCC 2-725, and the parties may shorten that period in their agreement to as little as one year. Most other contract claims, including claims for services, have six years under CPLR 213(2). Some old balances are too old to collect.
Fees and interest.
In New York, each side usually pays its own lawyer unless the contract says otherwise. Whether the supplier can add its attorneys' fees depends on the paper you signed. See when the loser pays attorneys' fees.
What to Gather Now.
The summons and complaint, the credit application and any terms and conditions, the purchase orders and invoices, delivery receipts and bills of lading, your payment records, and every email or letter in which anyone at your business questioned a bill, a delivery, or the quality of what arrived. Those documents usually decide how strong the supplier's case really is.
Frequently Asked Questions
Do I have to answer if I think the bill is wrong?
Yes. A disputed bill is a defense, and a defense only counts if it is raised in a timely answer. If the business does not answer, the supplier can seek a default judgment for the full amount claimed.
Can I deduct what the bad goods cost me from what I owe?
Under UCC 2-717, a buyer that notifies the seller of its intention may deduct damages resulting from a breach from any part of the price still due under the same contract. Notice is the key step.
How long can a supplier wait to sue?
For a sale of goods, four years from the breach under UCC 2-725, unless the contract shortened that period. Most other contract claims, including services, have six years under CPLR 213(2).
Can the supplier sue me personally?
Only if you are personally bound, most often through a personal guarantee in the credit application. Check what you signed.
Tell Me About the Case.
I handle business lawsuits where $25,000 or more is at stake, in New York Supreme Court. Send me a short description and the date you were served, and I will tell you where things stand.
Phone: 212-233-0666 | Email: fabramson@abramsonlegal.com
Why the Courtroom Matters.
I have practiced in New York since 1997, and my office is in New York Supreme Court every week, in all five boroughs and in Nassau, Suffolk, and Westchester. I know how the parts run and what the judges expect, and that shapes every paper and every settlement conversation from the first day.
When you contact me, I run a conflict check first. If I can take the case, I will tell you plainly where things stand, what the deadlines are, and what it will take.
Related: Your Business Was Sued in New York · Sued on a Personal Guarantee · Default Judgment Against Your Business · Sued by a Consultant or Agency Over Fees · Common Defenses to a Breach of Contract Claim · Civil Litigation
Attorney Advertising. Prior results do not guarantee a similar outcome. This page is general information, not legal advice about your situation. The Law Office of Frederic R. Abramson, 160 Broadway, Suite 500, New York, NY 10038. 212-233-0666.