Legal Question in Business Law in California

I agreed to loan a company $10,000 for a period of 3 months minimum. The company is a sole-proprietorship owned by one individual. He signed the contract along with another individual, who at the time was working with this company. They paid back $5,000 and then took off with the rest of my money. I have filed a small claims suit for $5,000 (the remaining balance) against both individuals who signed the contract. There were no receipts for the money being transferred or repaid. At this point it's my word against theirs once it gets to small claims court. Is there any advice you can give me to better prepare my case since no receipts were involved. Also, can the 2nd individual say he is not liable in court since he was not part of the company, even though he signed his name on the contact? Thanks for your help!


Asked on 6/21/11, 7:15 pm

4 Answers from Attorneys
Isi Mataele 'Isi Mataele Attorney at Law

This is a breach of contract. The burden in on you to prove there was a contract. They can raise the statute of frauds if the second person signed as a guarantor if there was no contract. Basically you have to prove to the court's satisfaction that you are owed money. If you can show that you withdrew or paid money and they received money at or about the same time then it would be evidence there was payment.

Anything you can show facts making it more compelling.

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Answered on 6/21/11, 8:22 pm
Edward Hoffman Law Offices of Edward A. Hoffman

If you have a signed contract, then the case isn't just about your word against theirs. Did you advance the money by check? Did they make their partial payment by check? If so, you should be able to show the court copies of the checks. If you didn't keep copies for your records, you should be able to get them from your bank. Request them right away, though, since processing such requests can take time.

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Answered on 6/21/11, 8:22 pm
Kevin B. Murphy Franchise Foundations, APC

As a Franchise Attorney I agree with the previous attorney answer. With a signed contract, it's not your word against theirs with respect to whether or not there is a contract. And whoever signed it is liable, normally. Your real issue is not winning in small claims, bur collecting on the judgment. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation

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Answered on 6/22/11, 6:43 am
Shawn Jackson The Jackson Law Firm, P.C.

Well, to move this matter to a stronger position rather than simply testimonial evidence, it would be nice if you could obtain any documentary evidence such as copies of deposits into their business account to support the fact that you gave them the money. Any "records" of withdrawals, payments or deposits will help your case. You may also want to read the NOLO book on How to Win in Small Claims Court...and be sure to locate any assets they may have so that you can execute on the judgment.

By Grace...

Shawn Jackson ESQ. (707) 584-4529

Business Development Attorney

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Answered on 6/22/11, 7:27 am


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