What to Do When Another Business Sues You in Texas

You have been served. Now what?

For most business owners in North Texas, receiving a citation and a petition—being “served”—is an incredibly stressful experience. Whether it is a dispute over a contract, a partnership fallout, or an allegation of unfair competition, the emotional reality is often a mix of frustration and anxiety. However, once you are served, the “business” of litigation begins, and your emotional response must quickly take a backseat to a strategic, legal one. Most business owners have never navigated the court system, making the first 48 hours critical to the eventual outcome of the case.

The 20-day rule in Texas is not flexible

The most important thing to understand is that the clock is ticking. In Texas state courts, you generally have until the Monday following the expiration of 20 days after you were served to file a written answer. If you fail to respond within this window, the plaintiff can ask the court for a “default judgment.” This means the other party wins automatically because you didn’t show up to defend yourself. This deadline is one of the few things in law that is almost entirely inflexible; missing it puts your company’s assets and reputation at immediate risk.

What your first call to an attorney should cover

When you call a business litigation attorney, you need to be prepared. This isn’t just a casual conversation; it’s an intake process. Before the call, gather the paperwork you were served with, any relevant contracts, and a brief timeline of the dispute. During the call, the attorney will assess the “venue” (where the case was filed), the specific claims being made, and any immediate deadlines. You should ask about their experience in that specific court—such as the Collin County District Courts—and their approach to commercial disputes.

Common mistakes defendants make early in the process

In our experience at HKH, we see specific mistakes that can derail a defense before it even starts:

• Talking to the opposing party: Many owners try to “explain” their way out of a lawsuit. Anything you say can and will be used as evidence against you.
• Assuming it will go away: Ignoring a lawsuit is the fastest way to lose your business and personal assets.
• Waiting too long to retain counsel: Waiting until day 18 or 19 to hire an attorney severely limits their ability to build a strong initial defense.
• Using a general practice attorney: Business litigation is specialized. Attempting to handle a complex corporate matter with a generalist can lead to missed procedural nuances.

When to settle and when to fight

Every lawsuit is a business decision. At HKH, we help clients weigh the cost of litigation against the potential risk. Not every dispute is worth a three-year battle in court; conversely, some claims are so meritless or damaging that they must be fought to a verdict. The decision to settle or fight should be based on a cold calculation of facts, law, and long-term business impact.

If your business has been served with a lawsuit in North Texas, contact HKH to schedule a consultation at our Business Litigation page.