According to the American Lawyers Quarterly (ALQ), a commercial claim “arises from an obligation to pay for goods sold or leased, services rendered, or monies loaned, for use in the conduct of a business or profession.” ALQ is a directory of law firms specializing in collections, creditors’ rights and bankruptcy.

At its core, a commercial claim is an obligation for payment. This payment can be in the form of money or “thing of value arising out of any agreement or contract,” states Law Insider.

The obligation arises from the course of conducting a business, and the payment is for (a) goods sold or leased, (b) services rendered, or (c) monies loaned. This means that in the course of doing business or in practicing his/her profession, the claimant sold or leased goods, rendered services, or loaned monies to the defendant. The transaction is between an individual or a business entity and another individual or business entity.

The claim may be based on a lease agreement, guarantee, consignment transaction, security agreement, or any other kind of similar business transaction. So, the contract should not be primarily for personal, family, or household purposes. And, the agreement can be expressed or implied. 

The ALQ states that “an ‘average’ commercial claim may be defined for general purposes as $2,000.” And, it does not include damages arising from personal injury to, or the death of, an individual, according to Cornell Law School’s Legal Information Institute.

Commercial Claim vs. Retail Claim

In commercial law, there are two types of claims. Commercial claim is one, and the other is retail claim. 

Both commercial and retail claims arise from an obligation to pay for goods sold or leased, services rendered, or monies loaned. However, they differ in how these are used. In a commercial claim, the goods, services, or monies are used in the conduct of a business or profession. Meanwhile, in a retail claim, they are for personal, family, or household use. Because of this, the debtor is an individual.  

As such, retail claim is also known as consumer claim because the obligation arises from a retail transaction where a consumer is obliged to pay. 

“A retail claim is a claim which arises from any obligation of a consumer to pay money arising out of a transaction in which the goods, money, financing, lease, property, insurance, or services rendered are the subject of a transaction which are primarily for personal, family, or household purposes.”

How Are Commercial Claims Prosecuted?

A commercial claims suit typically follows the process outlined below. However, this is a simplified and simpler version of the prosecution procedure for commercial claims. The actual steps and proceedings will depend upon the facts of the specific case filed in court. If you have any questions or clarifications about the steps, talk to your lawyer about it. 

Review of file

Once you’ve decided to push through with a commercial claim suit, you’ll need to send your lawyer the file for them to review. You should identify the amount that is owed to you and the legal reason that you are owed this amount. It could be because of a promissory note or a breach of contract or some other reason. 

Sending of demand letter

Once your lawyer has reviewed your file, they will then proceed to drafting and sending a demand letter to the debtor. The demand letter is a formal letter that asks the recipient to perform or fulfill a legal obligation. It should describe or state the agreement and provide an opportunity for them to address the issue. 

If they respond, then your lawyer can set up a payment plan so that you can receive what you’re owed. If they don’t respond, then your lawyer will proceed to the next step. 

Filing a commercial claim suit

In this step, your lawyer will begin preparing the lawsuit. Then it will be filed. 

Obtaining judgment

Once the lawsuit is served to the debtor, your lawyer will monitor the case. They’ll want to get a default judgment, which will only happen if the debtor or defendant fails to respond to court summons. In other words, the other party fails to appear in court. 

If the debtor responds, your lawyer will guide you on what additional litigation strategies you might take. The goal is to obtain a summary judgment against the debtor. A summary judgment is a judgment by the court without a full trial. Otherwise, the case goes to trial. 

Enforcing the judgment

Assuming you receive a favorable judgment in court, your lawyer will help you enforce that judgment. For instance, they could obtain a post-judgment court order for an asset hearing, which is a way to collect on a judgment. Or, they could file for a lien to be placed on the debtor’s property or file garnishments on their money. 

If they don’t appear at this hearing, your lawyer could move for holding the debtor in contempt of court or their arrest. 

How to Decide If You Should File a Commercial Claim

If you’re having problems with collecting payment from an individual or business entity, you might be considering filing a commercial claim against them. But, how do you decide that this is the best course of action to take? Here are some things to consider when deciding on filing a suit. 

Cause of action

First of all, you have to determine if you have a genuine legal claim that has a high enough economic value. You should also have sent a final demand as part of your effort to settle the matter outside of the court. 

Statute of limitations

Another thing you have to consider is any applicable statute of limitations. This refers to the maximum time you can initiate legal proceedings from the date of the alleged offense. Ensure that you have ample time and avoid filing a suit toward the end of the statute of limitations. 


Note that courts have their own jurisdictions and lawyers too can only operate within their state, for instance. So, if the debtor is living far from where you are, weigh if it’s worth it to sue them. Think about whether you can handle the cost and the inconvenience you’ll surely get from the experience.  

Time and resources

Filing a suit will require you to hire a lawyer, and remember that you won’t be able to recover those fees. Based on a U.S. News report, the national average is at $327 per hour. This will increase or decrease depending on the size of their film, the number of years of law practice, their type of practice and types of cases handled, and their location. 

In addition to money, you’ll also have to make time for the hearings and meetings with your lawyer. Do you have the energy? Plus, lawsuits are emotionally draining for most people.