An example of a counterclaim is if Company A sues Company B for breach of contract, and then Company B files a suit in return that it was induced to sign the contract under fraudulent conditions, according to Cornell University Law School. Counterclaims are typically filed by a defendant against the plaintiff in an effort to gain relief from the original claim in a lawsuit.Continue Reading
Counterclaims are known as either compulsory or permissive, says Cornell University Law School. Some compulsory counterclaims, if proven, nullify the plaintiff's original claim, such as the example above. In such a case, the court addresses the claim and counterclaim at the same time. Other compulsory counterclaims have to be connected to the same transaction or occurrence as the original claim. These claims are not necessarily addressed at the same time as the defendant's original claim.
If a defendant does not raise what is considered a compulsory counterclaim during the original case, he may not file a lawsuit at a later date under the same grounds. Permissive counterclaims concern matters not related to the defendant's original claim in the case, explains Cornell University Law School. Such claims allow both parties in the case to settle all unrelated disputes in the same case. The defendant bears the burden of proof in a counterclaim.Learn more about Law