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What to do if a Company receives a Legal Notice

All corporate business relationships are handled through proper legal agreements like Supplier agreement, vendor agreement, service agreement, franchise agreement, and many more. The entire responsibilities and rights are guaranteed under this agreement. So if the right of one party is affected, what would be the consequence?

One of my client

It’s a bright afternoon, one of my clients Mr.Meenakshi Sundaram who looks very anxious and restless sitting in the waiting room. I asked my reception table to send him in immediately. He entered my room with worry and some concern. To make him feel easy, we offered him tea and enquired about his concern. He, with a nervous tone, said he had received a legal notice from a manufacturer to who he is supplying raw materials to. I had gone through the legal notice and it said that our client had not supplied the goods on time as agreed through the supplier agreement. In the agreement, I could see a clause called force majeure which is the Act of God. I explained, this being a COVID time, we can use this as a defense and we can come out of the liability. Now I could hear the relaxed long breath from him.

What is a business-related Legal Notice?

A business-related legal notice is a legal way of communication to one party who may be a business entity or even an individual where we are intimating them that we intend to initiate legal action against them. It is the final step taken before filing a court case to enforce our civil rights. Through this legal notice you are informing or warning other parties that if they fail to comply with something which is already agreed upon, we may take legal action against them.

In what situations we can send a legal notice

There are numerous situations in business where you can send or receive legal notice. However, the most common ones are:

• Breach of contract
• Disputes between directors
• Disputed between manufacturer and supplier
• Disputes between franchisor and franchisee
• Dispute between the company and a customer
• Disputes between manufacturer and distributor

Statutory Provision

Under the Code of Civil Procedure 1908, Section 80 lays down the provision for filing a legal notice in civil matters. The following are the required information which are:

There should be precise mentioning of the facts and statements in relation to the grievance for which action is to be taken.
Mentioning of relief from the grieving party.
Also mentioning the ways to resolve the problem in hand with the summary of the facts.

Elements of a legal notice

A legal notice should have proper basic elements in it

1. Parties name: If an advocate is sending a legal notice, it should have the details about the parties of it. That includes name, company name, and address of both the parties
2. Facts of the case: The second part is facts of the case, that is to say, what is your version of the story
3. Cause of action: In the legal system, a “cause of action” is a set of facts or legal theory that gives an individual or entity the right to seek a legal remedy against another.

How to respond to a legal notice

1. Do not become panic: Whenever ever receive a legal notice, first avoid becoming panic. And make yourself easy

2. Read the notice carefully: The next step is to read the Legal Notice carefully what are facts stated, what is the claim and action to be taken, be it a reply to the notice or some other action.

3. Collect the Agreements: If there are any documents or agreements related to the facts of the case carefully so that it can clarify the details stated in the legal notice.

4. Consult an Expert: before replying to the notice consult with a lawyer who can explain to you the ambiguity and loopholes. Furthermore, whatever you state in the reply notice, you cannot change the statement in the future during the litigation

5. Try for amicable settlement: As a last opportunity try for some opportunity to settle the matter affable. Because a relationship is always important

6. Send a reply: Now you can discuss with your lawyer by giving him sufficient facts and through that, he can easily reply to the notice

The time period to send a reply notice

Reply to any legal notice depends on the time frame given by the opponent’s advocate in his legal notice. Generally, the time limit provided in the legal notice is 15 to 20 days and within which one has to reply. If you fail to reply to the legal notice, that the other party is free to initiate any legal proceeding as per law against you.

Can I restrict myself from receiving the legal notice?

No. It is always advisable to reply to the legal notice. Plenty of people always refuse or return the notice, that's not the right way, always face the situation with courage.