Legal Question in Credit and Debt Law in Maryland

Client is not paying for goods & services.

I have a client in Delaware that has outstanding receivables from May 30, 2002. I have not had any success in getting the client to make payments etc. This client is a ''seasonal'' business and I understand that they are now out of the open season; however, I am a small business and the money owed is substantial. Can I go to their place of business and take the equipment I installed? What can I do to try to get the money owed?


Asked on 1/30/03, 1:46 pm

1 Answer from Attorneys

G. Joseph Holthaus III Law Offices of G. Joseph Holthaus

Re: Client is not paying for goods & services.

Whether you have a right to repossession is based largely upon the terms of the contract and the type of transacation.

If you are a secured party (i.e., the loan was collateralized) then you may be able to reposses under Section 9-609. You have a right of repossession even if not a secured party but this will involve additional judicial process than if you are a secured party.

You may have a right to "self-help" repossession and this depends on the contract and its terms. Such terms must be provided for within the agreement in a legal manner. But even if you have a right of "self-help" repossession, you must proceed with the utmost of care or risk being charged with a violation of breaching the peace. Breach of peace in a term that has intentionally been left open for judicial determination.

Using judicial repossession, you will avail yourself of an additional benefit of being able to use law enforcement assistance.

Your agreement may or may not protect you in other ways. There are several aspects of legal protection that could be part of your contracts. If your business involves the sale or lease of expensive equipment and your contracts do not adequately protect you, you should consider the cost of hiring an attorney to prepare a contract that incorporates adequate protective measures against the losses associated with a buyer's non-payment or effecting judicial enforcement for repossession.

Your situation involves a debtor in Delaware. Assuming your contract does not provide you with effective protection, you would need to obtain judgment in Delaware against the debtor or obtain judgment in Maryland and then seek exectution in Delaware. Whether your contract sufficiently protects you so that you may avoid these costs is something that cannot be answered without seeing the contract of sale.

The material above is general information about the law in Maryland and not in Delaware. Moreover, the above is simply information about the law and is not legal advice upon which you can rely for your specific situation. Without discussing the details of your circumstance and providing an attorney the ability to ask questions, legal advice cannot be provided.

Contact me at (410) 799-9002 if you would like to for me to review the contract of sale for the above matter or if you would like to pursue improving your contracts so that they better protect your legal interests.

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Answered on 1/30/03, 3:25 pm


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