Here's What Everyone Gets Wrong About Small Claims
You can actually resolve pretty large disputes in small claims, despite the otherwise low small claims limit for your jurisdiction. Here's how.
"Complaint for money owed"
Let's say that you have a contract dispute with a vendor from whom you used to buy some sort of service; and let's say that, in total, there is a total "case stakes" of $60,000: you say that the vendor owes you a refund for your $5,000 deposit, and you also say that you are not obligated to pay the $55,000 your vendor says remains under contract.
That means that the total amount of money you claim that the vendor owes you is only $5,000. But, it being a contract dispute, it may also mean that, were you to prevail on whatever your legal position is in the dispute, you would win on the question of whether you owe the vendor $55,000 more.
The key is understanding that your ticket to small claims court is usually what is referred to as the "complaint for money owed," in which you merely state how much money you believe your opponent owes you.
At trial, if your basis for that position entails some counter-position to that of your opponent, then, in the course of arguing why your opponent owes you $5,000, you may also obtain a verdict stating (or implying) that you do not owe your opponent $55,000. In doing so, you would have solved a $60,000 issue in small claims court, provided that the small claims limit for your jurisdiction is $5,000 or higher (Maryland, for example, since the small claims limit there is $5,000).
Diagramming this scenario
To put this all together, here is scene played out at small claims trial.
You show up to court, and your case name is called. You take your position and wait for the judge to ask you to give your side of the story. When the judge asks you for it, you explain that...
- You were once a customer of this vendor.
- You had entered into a contract with the vendor whereby you had agreed to pay the vendor a $5,000 deposit and some number of monthly payments, in some amount, thereafter; and that the vendor had agreed, in exchange, to render some service.
- At some point thereafter, however, you allege that the vendor failed to render the service as agreed, and that you had consequently requested termination of the contract; and that the vendor refused to permit termination.
- The present dispute followed, in which the vendor said you were liable to pay vendor $55,000 more, and that vendor was not obligated to return your $5,000 deposit to you.
- Your counter-position, though, is and has been that, due to vendor's failure to perform as agreed, you are no longer obligated to remain in the contract and purchase vendor's service; and that vendor is instead obligated to return to you your $5,000 deposit.
You finish speaking, and the judge turns to your opponent to ask for their side of the story. Your opponent denies that the opponent failed to render the service as agreed. The opponent admits that there were some service interruptions, and that these were the interruptions you cited when you claimed that the opponent had breached the contract. But the opponent's argument seems to be that, in the opponent's opinion, these service interruptions do not amount to a breach of contract. As such, the opponent argues, you remain liable to opponent under the contract, and opponent is free to keep your deposit.
Upon considering the evidence and arguments, the judge decides in your favor. This means that the judge found your position to be more credible than your opponent's. So, the judge issues a ruling that your opponent owes you $5,000 because your opponent did breach the contract. That last part is worth 11x more to you that the first part, because that last part precludes your opponent from enforcing the contract against you to obtain the $55,000 they had said you still owed them. But, in this scenario, your win would entitle you to both pieces, for a total "outcome value" of $60,000, in a jurisdiction whose small claims limit is only $5,000.
The "small claims limit" you're constrained by, then, is merely the amount of money you want to get back from the opponent--not by the total "case stakes."