Real reasons people sue

Posted by

Andy Beal recently wrote his thoughts on how to not get sued for defamation online… this coming after a 750k lawsuit was filed for someone something said on yelp.

First I want to say that I have a lot of respect for Andy. He is a really good guy and he has built a very underrated service in Trackur.

Andy’s post is mostly how to keep yourself from getting sued. Now I am not sure Andy’s experience as a plaintiff or defendant but I have found myself on both sides of that isle since I was first sued in federal court way back 8 years ago (that is the intial letter that started it all. The rest was sealed in the settlement). Probably going on 2 dozen.

I have been sued for defamation, libel, slander, hacking someones Facebook (really), and other things. I have sued people for mostly trademark infringement and copyright infringement with a few breach of contracts mixed in.

I absolutely love the legal system. Probably too much. In all of the cases we have been in we have never lost a motion let a lone a judgment. The best part? I have ALWAYS come out cash-flow positive from every lawsuit we have been in. I know that sounds crazy but counter suits are a bitch =P.

A.D.D. reminiscent moment – the only college level classes I truly loved were my pre-law classes. Especially legal debate. I really believe I would have been a hell of a litigator… but anyway…

Oh speaking of lawyers mine always remind me to say that I am not a lawyer and you should consult one before acting on anything I say.

Got it?

As always I am going to talk from my own experience. I am not going to tell you what to do.

This post is more about how to use the legal system… not really to protect yourself. Honestly at the end of the day there is no such thing as protecting yourself. There is only mitigating your risk, intent, and a few other things I will try to point out. So I will take Andy’s points completely out of context to make me look smart.

Ok here is Andy’s first tip on how to not get sued:

Always make sure you have a contract. This benefits both the buyer and seller, even if they know each other and have the best of intentions.

I semi agree with this but not so you don’t get sued but so each party is aware of each others expectations. It’s one thing to come to an agreement over drinks but its quite another to get it down on paper. Its VERY important to have a contract so EVERYONE is clear of what assets and liabilities each party is contributing in this contract.

Now from my experience a contract means dick all as far as keeping you out of a lawsuit. Now your going to hear a ton of people disagree with me when I say that but ask them how much experience they have in the actual matter…

From my experience lawsuits have always been filed because of intent & pride. No matter what the contract said one party felt the intent of the other was to do them harm. Now it becomes a matter of pride.

Unfortuantely almost all of my business deals that came to a legal ending ended with a non disclosure agreement so I regretfully can’t give you much of a specific example but lets just say that you came to me and wanted to start a business together.  Terms are simple.  My obligation is to provide technical services and financial backing.  In the operating agreement it says you are going to provide people for customer service, sales team, whatever.

Then one day I find out my money is actually going to paying for you to outsource the customer service.  Now in the fine print you could actually do this.  But I know your intent is clearly against what we both agreed on in that you would provide the people who were already on your staff free of charge.  But yes technically because of this contract you could do that.

So if you didn’t come to Jesus I would file suit claiming breach of contract and a lot of other thing that would cost you a lot of money.  Again mostly because I know you intended to do me harm and also my pride was damaged.

Ok lets look at some real world outside the box cases.  We have had several cases with people who have used my AdSense Photo to peddle their shitty products. This might not seem like a breach of contract but it is. That photo can be used in certain ways. When people intentionally use my likeness to confuse consumers into thinking their shitty product is some how related to mine that fucks with my pride.  I pride myself on building quality products and services.

I could honestly go on forever about cases we have been through…  but I need to go out to the beach (I am still in Maui).


15 thoughts on “Real reasons people sue

  1. Eric

    Seriously! You have came out ALWAYS on top even with the cash!?!?

    That right says it all to me and hands down give you the credit!

    I would be interested in hearing more of these cases, you really got me interested. Especially with some of your facebook deals or what not.

  2. Andy Beal

    Thanks for the shout out Jeremy!

    I think we’re in closer agreement than you may have thought. ;-)

    Contracts are great at helping you win your court case, but you are right, they don’t do much to actually stop a lawsuit. I’ve said for years that a contract is only as good as your pockets are deep. In other words, if don’t have the money to enforce or defend a contract, it means squat.

    Thanks again for the shout out. Keep on, keepin’ on my friend!

  3. Rita

    While you did end up coming out positive in money after each of those lawsuits was it really worth the time, effort, and headache?

  4. Brandon

    Great post, I have tried deals both ways, contract and no contract handshake. Contract with wins every time and it also protects your family a lot better than a handshake.

  5. yragcom1

    Bottom line: it never hurts to lawyer up, even if you’re using crappy counsel. The letterhead of a lawyer alone scares the crap out of anyone messing with you 9 times out of 10. For $40 a month, you can’t beat a Pre-Paid Legal account to do your small dirty work and to get stuff moving.

  6. Oscar Gonzalez

    Pretty cool and thanks for the tips. Freakonomics also says that maybe a big part of lawsuits is attitude. And I think yo u point that out in the “come to Jesus” thing. Where if the person doing the “wrong” doesn’t try to repair it that’s when a lawsuit happens. They point this out about doctors and how they get sued for malpractice, seems like most times, these lawsuits really come from the fact that the doctor was a bit of an a*hole when providing services.

Comments are closed.