Legal Question in Civil Litigation in New Jersey

My corporation was recently asked to respond to a claim by the American Arbitration Association. One of our employees had signed a 3 year contract with a large corporation for a service. The service was provided for a measurable time, but the employee never had the right to sign for my corporation. He is merely an employee and has never been allowed to sign any contracts. However, the contract states that he does have the right to sign for it.

Essentially, the company stopped providing the service due to some disagreement that they had with the employee. Instead of attempting to contact any owners of the corporation or respond to any attempts to fix the issue with said employee, they waited 6months and went to the AAA.

We were informed of the claim at which point we first learned of the whole ordeal. Our position on the matter was simple: we agreed to pay for the remainder of the services rendered that were not paid for (a total of 2-3 months) because we had received the services despite never having initiated the contract ourselves. However, we held that we were not responsible for the remainder of the contract as the service was discontinued and the contract itself was essentially illegal - no member of the corporation itself had ever seen or signed the contract.

We assumed that we were in the right. How could anyone sign a contract using our corporate name as the beneficiary without our express permission and signature? However, the AAA awarded the company filing the complaint the full amount of the contract and then some extra that they wanted.

The arbitrator simply said that there was a contract and we as a corporation are legally bound to it. On top of that, he did not ask us to pay the remaining invoice but rather the full amount of the contract despite never having received those services.

My question is this: what do i do now? I never even wanted to use the AAA i merely responded to a claim when I learned of it. Now, they're asking me to pay for their services as well as for a contract I never signed or had anything to do with. Is there an appeals process? Should I take this to a real lawyer?

Any help and advice would be greatly appreciated.

Thanks.

J


Asked on 9/23/10, 12:26 pm

1 Answer from Attorneys
Randall Brett Law Office of Randall P. Brett

You need to speak with an attorney immediately. Essentially, you are disputing whether a contract existed between your company and the large corporation. Based on what you have written, an arbitrator determined that a contract existed and your company did not fulfill its end of the agreement. Most contracts that have an arbitration clause state that the arbitrator's decision can be entered into and enforced by the court, which could result in a judgment entered and your assets seized in order to satisfy the judgment. An attorney can review the alleged contract and the arbitrator's decision and advise you accordingly. If appropriate, the attorney can file a motion to set aside the arbitrator's decision or to have the contract itself declared unenforceable. Feel free to call if you would like to schedule an appointment to discuss this further.

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Answered on 9/28/10, 12:55 pm


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