Legal Question in Business Law in California

intentional interferance with an implied contract by a supplier

My company began working on a substantial job with an end user in January. I brought to them this idea of advertising their product. All of the intimate info regarding the client, size and price were shared with my supplier.

It was conveyed to me via verbally by the CEO that they wanted to award me the job and they asked me to complete several designs. After working together for 6 months...a competitor came into the picture, and I shared this with my supplier. Unbenounced to me my supplier feared the competitor could win the business and they decided to go direct to MY customer. They shared with my customer that I was a broker and all of the details of my organization and convinced them to go direct. My share of this job was approximately 75,000.......now I stand to make nothing. The supplier seems to be a bit worried and says they are willing to pay me a small finders fee. Conversely, the competitor who stepped into the picture is wanting his piece from the supplier as well. You see, they are HIS supplier too. Do I have any recourse?


Asked on 7/05/04, 9:36 pm

5 Answers from Attorneys

Michael Olden Law Offices of Michael A. Olden

Re: intentional interferance with an implied contract by a supplier

You absolutely have rights in this situation. The time you spend in developing a business model, project has more than enough value to you. Where suppliers actions involve both breach of contract with you but unfair competition. They have reached the relationship in such a way as to interfere with a contractual obligation between yourself and your client and/or economic advantage to you in the amount of whatever your damage is. A mere finders fee is insufficient in this situation and they have put their foot ride it. They may now have "to fees" to pay one to you and 12 fares and you or respective client. I've handled numbers of these actions for 30 years since the first case came was reported true the Supreme Court of the steady California and approximately 1969.I have been practicing law in the San Francisco Bay area for approximately 35 years and expert in the area in the category in which your question is placed. I feel I can help you in this matter and if you wish to consult with me please contact me at 925-945- 6000.

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Answered on 7/06/04, 11:13 am
Terry A. Nelson Nelson & Lawless

Re: intentional interferance with an implied contract by a supplier

Yes, you may be entitled to the commission, but may have to sue to get it. An attorney may be able to credibly threaten suit and work out a settlement acceptable to you. Contact me if interested in getting fair value for your services.

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Answered on 7/06/04, 12:38 pm
Edward Hoffman Law Offices of Edward A. Hoffman

Re: intentional interferance with an implied contract by a supplier

You may have a good case for intentional interference with prospective economic advantage, though I would need more details about the negotiations and the proposed deal -- and of what information was available to your competitor -- before I could say how strong your claim might be.

You could conceivably have already formed a contract before the competitor stepped in, though the limited facts you have provided do not tell me enough to make this call. If there is no contract in place then you cannot state a claim for interfering with it (the claim is properly called "inducing breach of contract).

The claim based upon prospective economic advantage is probably your better bet, but if in doubt you might want to allege both and see which one the evidence ends up supporting.

Feel free to contact me directly if you want to discuss your situation.

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Answered on 7/05/04, 10:07 pm

Re: intentional interferance with an implied contract by a supplier

You may have a good case. The causes of action are not just interference with contractual relations or prospective economic advantage but also one of unfair competition/unfair business practices.

The problem with this case deals with the realities of the situation, i.e., that you are not talking about much money in terms of actual litigation expenses and attorney's fees. Although $75,000 is a lot out of pocket, it will get chewed up in litigation. Yes, there is the possibility of recovering punitive damages and attorney's fees. However, the reality is that they are not recovered frequently and only going all the way through trial.

It is possible to negotiate a settlement.

I would be happy to chat with you on this subject. You can go to my website to discuss this. www.legalwarriors.com

J. Caleb Donner

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Answered on 7/05/04, 11:26 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: intentional interferance with an implied contract by a supplier

Your situation arises frequently in "daisy chain" supply arrangements, where the value of your service and hence your ability to get paid depends upon information you possess and not much else. Once you pass the information along, your lack of a formal contract exposes you to the proverbial "commissiondectomy."

At that point, the question arises whether the information-passer has a contractual relationship with the beneficiary of the info that's going to protect him and his role.

A basic principle of contract law is that no contract arises until there has been an offer followed by an acceptance. In some negotiations, it is very easy to identify both the offer and the acceptance, and therefore to determine the exact moment at which the parties are in a binding contract. However, sometines the facts are very murky, especially in situations involving wheeler-dealer, broker, finder and similar informal deal-makers who usually don't get around to putting anything in writing until it's too late; or, if they do put something into written form, it's too vague and too many terms are omitted to tell what the real deal was supposed to be, or even that an agreement was reached.

Your problem is twofold: finding facts showing an offer and an acceptance, and proof of those facts. With $75,000 at stake, you definetly have good economic justification to see a sharp contract lawyer for at least an initial consultation as to whether a contract arose and whether it can be proven to the satisfaction of a judge or jury.

Again, winning a contract suit here will depend upon your facts vs. the defendant's, and your credibility as a witness vs. his. The outcome is not at all clear-cut.

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Answered on 7/06/04, 12:34 am


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