Compulsory Counterclaim

A counterclaim that must be brought in response to a suit in a primary case. If a plaintiff sues a defendant and that defendant has potential counterclaims against the plaintiff that it does not assert, it cannot then bring the counterclaims as a separate case – in other words “use it or lose it.”

Usually a compulsory counterclaim is one in which the court in which the primary-case is pending has proper jurisdiction and which would tend to nullify or negate the result in the pending case; often the counterclaim will arise out of common facts and events as are at issue in the existing claim. Thus, for example, in a case for infringement of a patent, a counterclaim by the defendant seeking an judgment of non-infringement or invalidity would normally be compulsory; similarly, in a claim for non-payment for goods or services, a counterclaim alleging defects in the goods or incomplete or incompetent provision of the services would also be compulsory.

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