Legal Definitions - counterclaim

A counterclaim is a legal claim made by a party who is being sued (the defendant) against the party who initiated the lawsuit (the plaintiff). It is essentially the defendant's opportunity to assert their own grievance or demand for relief against the plaintiff within the same legal case. Instead of just defending against the original claim, the defendant becomes an "offensive" party regarding their counterclaim, seeking a judgment in their favor.

Counterclaims serve to resolve all related disputes between the parties in a single lawsuit, promoting efficiency in the legal system. Depending on their nature, some counterclaims must be raised in the current lawsuit, while others may be raised at the defendant's discretion.

• Example 1: Construction Dispute

  Imagine a homeowner, Ms. Chen, sues a contractor, Mr. Davis, for failing to complete a kitchen renovation on time and to the agreed-upon standards. In response, Mr. Davis files a counterclaim asserting that Ms. Chen repeatedly changed the design plans mid-project and delayed payments, which directly caused the delays and increased costs.

  How this illustrates a counterclaim: Mr. Davis, the defendant, is not just defending against Ms. Chen's claims; he is actively seeking his own relief (e.g., payment for extra work or damages for delays) from Ms. Chen, the plaintiff. This counterclaim arises directly from the same renovation contract that Ms. Chen is suing over, making it a central part of resolving their dispute.

• Example 2: Vehicle Accident and Unrelated Debt

  Suppose Mr. Lee sues Ms. Rodriguez for damages to his car after she accidentally backed into it in a parking lot. Ms. Rodriguez admits fault for the accident but, in her response, she also files a counterclaim stating that Mr. Lee owes her money from a separate personal loan she gave him a year ago, which he has not repaid.

  How this illustrates a counterclaim: Ms. Rodriguez, the defendant, is making a claim against Mr. Lee, the plaintiff, for an unpaid debt. While this debt is entirely unrelated to the car accident, the legal system often allows parties to bring such unrelated claims together in one lawsuit (a "permissive" counterclaim) to settle all their disputes efficiently, rather than requiring two separate court cases.

• Example 3: Business Software Agreement

  A software development company, "InnovateTech," sues its client, "Global Solutions," for unpaid fees for a custom software system. Global Solutions responds by filing a counterclaim, alleging that the software delivered by InnovateTech was defective, failed to perform its promised functions, and caused significant financial losses to Global Solutions' operations, for which they are now seeking compensation.

  How this illustrates a counterclaim: Global Solutions, as the defendant, is asserting its own claim for damages against InnovateTech, the plaintiff. This counterclaim directly challenges the quality and functionality of the software for which InnovateTech is demanding payment. If Global Solutions' counterclaim is successful, it could not only negate InnovateTech's claim for fees but also result in InnovateTech owing Global Solutions money for the losses incurred.