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Small Businesses and Theft of Service

Small Businesses and Theft of Service

One of the biggest problems plaguing small businesses are collections and theft of services. Whether you are a plumber, home entertainment specialist, or general contractor theft of services may be a constant problem for you. Often, the individuals that refuse to pay for services are the customers with the most money.

Certain situations arise when a customer receives substantial amount of services and work product but refuses to pay forcing small business owners to take action. The best recourse for small businesses is the Theft Liability Act codified in the Texas Civil Practice & Rem. Code § 134.001-134.005. This act was passed to ensure that civil theft from small businesses would be dealt with harshly.

The Civil Theft Act was passed in the 80’s at the bequest of the Texas Retailers Association to deter shoplifting and hold such offenders civilly liable.  Throughout the years Civil Theft Act has expanded and has been utilized primarily for small businesses to seek remedy for loss of services and loss of property.

If a small business owner, such as a carpenter, plumber, retail shop owner, or general contractor have property stolen or services such as installation, remodelling, or repair stolen, then the Civil Theft Act grants these small business owners a cause of action with a serious bite. The remedy’s available for small businesses or sole proprietors are generous. If a small business owner takes the case to county or district court and prevails then he is entitled mandatory attorney’s fees, that are fair and reasonable.

The small business owner may also seek:

  1. All Court costs;
  2. Actual damages;
  3. Up to 1,000.00 in special damages;
  4. Prejudgement and post-judgement interest; and
  5. Exemplary damages (Punitive) 3 times the actual loss.

The problem is that many small businesses and sole proprietors do not have the funds to fully litigate the theft and the case proceeds to mediation for some type of settlement. If a small business owner can fund the litigation and prove their case to a judge or jury, then the penalties for breaching the Theft Liability Act are harsh and will compensate the costs for litigation. The Theft Liability Act was created as a tool to deter theft of services and property due to the constant problem in our society. Attorney’s fees are mandatory if the small business owner prevails unlike breach of contract where attorney’s fees are discretionary by the Court.

If you are a small business owner or sole proprietor and are being pushed around by a wealthy customer remember that you do have the Theft Liability Act to fall back on if litigation is necessary. If you are in need of services contact Nacol Law Firm to inquire about all the remedies available, if litigation is required.

Julian Nacol, attorney
Nacol Law Firm

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