Legal Question in Business Law in California

Greetings,

I am a one man S-Corp, I do Engineering consulting for various clients. One client in particular work on a Purchase Order (PO) system, however i would say 90% of the projects I did for them they issued me a PO AFTER the work has been completed, cause most of these jobs they want ASAP, many times they issue a PO 1 week to 1 month after i do the work. They were always good about it, even though they were late until now. I did some work for them as far back as March, and been requesting POs since then, they are not refusing to pay or issue POs for these jobs saying these jobs were killed. I have detailed emails from their Project Managers requesting the work from me, and me completing the work. This company so far paid me $78k for work done since last year, they have $11k in open invoices now (with POs that are 50-90 days old) and the jobs they are asking me to write off and not pay is $4150. I had agreed to write off $2400 and pay me the $1750, they refused, now i am seeking the entire thing... Do I have a case? what can i ask for? can they screw me out of the 11k they already owe me?


Asked on 11/27/10, 10:20 am

6 Answers from Attorneys

Terry A. Nelson Nelson & Lawless

You have nothing to lose by suing for the full amount. Why would you let them talk you out of getting paid?! Feel free to contact me if serious about getting counsel to helpl.

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Answered on 12/02/10, 11:12 am

Unless you have pretty much an iron clad agreement not to do work without a PO or you don't get paid, the PO issue is a red herring. It's basic black letter law that if you do work at the request of a person with the understanding you will be paid, you can collect. Your only disadvantage is that as a corporation you have to be represented by an attorney, which will eat up your collection.

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Answered on 12/02/10, 12:01 pm
Ashley C L Brown Law Offices of Ashley C. L. Brown

It sounds like you definitely have a valid claim against them, and the emails are proof of them ordering the work from you. Sometimes a demand letter from an attorney is all it takes to get people to pay what they owe. And, if not, you could file a complaint against them and possibly seek attorneys' fees and other damages.

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Answered on 12/02/10, 2:44 pm
Jim Betinol Withrow and Betinol Law

Looking at the facts, you clearly have a position to sue for the full amount of the work without the PO ($4150) and for the other PO's 11k. My firm has experience in handling purchase order transactions in the past. Feel free to contact my office for a free consultation and we can discuss your options and alternatives to bringing a lawsuit.

Jim Betinol

Attorney, Partner

Withrow and Betinol Law

[email protected]

(t) (424) 229-2560

Disclaimer: This communication does not create an attorney-client relationship and such a relationship can only be formed through a signed written agreement. This communication is not legal advice and should not be solely relied upon in making your legal decisions. Any situation depends on many different facts and specific laws that require an in-depth legal consultation to evaluate the best solution for your needs.

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Answered on 12/02/10, 3:11 pm
Kevin B. Murphy Franchise Foundations, APC

As a Franchise Attorney I agree with what the other attorneys say. The key issue is whether you have any writing with the client that provides for attorneys' fees in the event of a dispute. If not, the legal fees will eat up anything you ultimately win and then collect on. Of course, spending a couple hundred on a good attorney demand letter makes the most sense at this point. Reluctant clients have a major attitude change after getting such a letter. 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 12/02/10, 5:32 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Mr. Franchise gives a good summary of the prior advice. I would like to add a couple of thoughts: (1) Keep in mind that in Small Claims Court a corporation can sue for up to $5,000 and (2) can represent itself through a (non-attorney) officer, director or employee. Also, (3), the terms of a contract can be established, ascertained, clarified,explained or waived by the parties' actual prior performance under the contract. If your client has had a practice of expecting, accepting and paying for work started before a P.O. was issued, this practice is arguably part of your agreement. Finally, do a little on-line research on the principle called "quantum meruit" which allows someone who furnishes services at the express or implied request of another to recover the fair value thereof, even if the contract between them is defective, unenforceable or nonexistent.

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Answered on 12/04/10, 3:03 pm


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