What are the effects of a default judgment in a business litigation case?

A default judgment is a ruling a judge makes when one party does not appear or respond to a case. In a business litigation case, if a defendant fails to participate in the case, a judge may make a ruling in favor of the plaintiff, such as ordering the defendant to pay damages or comply with the terms of a contract. The effects of a default judgment can be severe for the defendant. A default judgment is legally binding, so if the defendant does not pay damages or comply with the terms of a contract, they may be held in contempt of court and be subject to additional fines, fees, or even jail time. The defendant may also experience a damaged reputation, as the default judgment will show up in public records and could hurt their credibility with future prospective customers, partners, or employers. In California, a defendant can also request relief from a default judgment if they can show they had a valid reason why they did not participate in the litigation. These valid reasons may include misunderstanding the court proceedings, not being aware of the lawsuit, or not having the resources to pay the damages. If the request is granted, the original judgment may be set aside and a new hearing will be set for the case.

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What are the effects of a default judgment in a business litigation case?

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