Legal Question in Business Law in New York

IT Contracts - the definition of "Client" when it comes to non-compete, SOW end dates, and steps I should take for a client�s refusal to pay for services rendered. I am an IT subcontractor - Old client structure = (Client A-->Client B-->Client C-->Client D-->My Old LLC). New client structure (Client A-->Client B-->New Client E-->My New and different LLC). Client D in the old structure still owes my Old LLC 30+k but is refusing to pay stating that my Old LLC is in breach of contract as I am still working at Client A's site; just in the new structure. I left the old structure because Client D would constantly starve me out by not paying my old LLC for 5-6 months at a time and when they did it would only be for 2 weeks of work. Client A and Client B supported and suggested that I move to another vendor chain/ Client (Client E in the new structure) that will pay consistently. To insulate and remove me/my old LLC from any entanglements, I set up a entirely NEW LLC (even in a different state) and I am now in a new contract structure with Client A�s suggested vendor (and getting paid!) . Slow paying Client D is now mad and refusing to pay for my/my old llc last 2 months of work claiming that I/My old LLC is in breach of contract. The contract states that I may not work for or solicit any Client D�s "Clients" in connection with the engagement for 12 months. Client A is at the heart of this claim. However, Client A made it very clear that it does not have any legal contracts with Client D and Client D cannot claim them as a "Client"; Client D can only claim Client C as their true client in the old structure as they have a contract between them and nobody else . To make it even more interesting the SOW that was signed between Client D and my old LLC expired 14 months ago (even though I continued to work past the expiration date of the SOW and I just left into the new structure about 2 months ago.). Do they have a case even though Client A is not a true �client� , the SOW that I/my old LLC was working under expired 14months ago, I ceased to operate the old LLC with which they had a contract with- that old LLC has not breach anything whatsoever as it is no longer in business/dormant. How do I/my old LLC collect this debt from Client D? Do they have a counter claim for damages against me personally or my old LLC?


Asked on 9/01/14, 10:00 am

2 Answers from Attorneys

Roman Fichman Esq. Law Practice of Roman Fichman Esq.

You have several legal issues that need to be properly reviewed. Including, the existing debt between the old LLC and the named client in the first SOW. The other legal issues would involve the ability of the new LLC to conduct business with either the chain of clients or with each client individually.

To be able to review documents in full an attorney client relationship would need to be established by formally retaining legal counsel. This review would only take a couple of hours and would not be expensive. It would allow you to properly chart your course. Ping me offline for help.

Roman R. Fichman, Esq.

www.TheLegalists.com │ @TheLegalist

email: Info (@) TheLegalists (dot) com

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Disclaimer: This post has been written for educational purposes only and was not meant to be legal advice and should not be construed as legal advice or be relied upon. No intention exists to create an attorney-client relationship or any other special relationship or privilege through this post. The post may contain errors, inaccuracies and/or omissions. You should always consult an attorney admitted to practice in your jurisdiction for specific advice. This post may be deemed as Attorney Advertising.

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Answered on 9/02/14, 4:48 am
Frank Natoli Natoli-Legal, LLC

STOP! Go no further until you have discussed your specific situation over with a lawyer in private. You simply cannot receive any actionable and frankly helpful advice over this free and public Q&A for something like this. Any and all written agreements will need to be reviewed along with all the facts and circumstances.

I suggest that you consult with a lawyer in private and discuss your objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with. If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Our firm is now referred by the American Bar Association (see under the New York section):

http://www.americanbar.org/groups/delivery_legal_services/resources/programs_to_help_those_with_moderate_income.html

Kind regards,

Frank

www.LanternLegal.com

866-871-8655

[email protected]

DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.

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Answered on 9/02/14, 5:15 am


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