When a defendant in a legal dispute or lawsuit fails to respond to a complaint filed by the plaintiff, the court may enter a judgment by default. This means that the court has found in favor of the plaintiff because the defendant has failed to appear and contest the allegations. Judgment by default is sometimes referred to as “default judgment” or “default award”.
Being on the receiving end of a judgment by default can have serious implications for businesses. A defendant that fails to respond to a lawsuit can find itself on the hook for significant penalties, from paying out monetary damages to potentially having to pay out punitive damages. In cases where there is a contractual agreement between two parties, a judgment by default can lead to breach of contract. A company that is found in breach of contract could find itself facing expensive legal action, so it’s important to understand the consequences of a judgment by default.
Avoiding Default Judgments as a Defendant in a Legal Dispute
When facing a default judgment, it’s important to take action immediately. A defendant must respond to the complaint within the set timeframe or risk being held in contempt of court. If the defendant fails to appear in court or respond to the complaint, the plaintiff is likely to receive a default judgment which will be enforceable by law. In such cases, it’s important for the defendant to either file a motion to set aside the default judgment or to appeal the decision in order to avoid the ruling being made final.
How to File a Motion to Set Aside a Default Judgment
In order to have the default judgment set aside, the defendant must prove that it did not receive proper notification of the lawsuit or that it had a legal excuse for failing to respond, such as mental incapacity or extreme financial hardship. Most state law requires that defendants file a motion to set aside the default judgment within a certain time period. The court must then determine whether the defendant has a valid excuse for missing the deadline or for not responding to the complaint. Depending on the circumstances, the court may choose to reverse the default judgment and order a new trial.
Business owners and managers should be aware of the potential consequences of a default judgment and take steps to ensure that they are in compliance with all legal obligations. It’s also important to be mindful of deadlines and ensure that all legal paperwork is filed and responded to in a timely manner.