Legal Question in Business Law in New York
NYC Business not honoring contract - how to collect
My California company had a signed contract with an NYC company (LLC) for computer consulting services for one of their clients. I would work for the client and the NYC company would take $2.00/hr from the bill rate as their cut.
The contract has ended and the owner/president now refuses to pay the rest of the amount due ($574). I have asked for payment verbally and in writing to no avail. He says that his manager who signed the contract should not have agreed to the cut of $2.00 per hour.
The contract has an arbitration stipulation. Can anyone suggest a way to recover my $574? I am considering small claims court since I have friends in NYC. Any ideas?
Thanks,
Steve
4 Answers from Attorneys
Re: NYC Business not honoring contract - how to collect
Tell the NYC company to fire the manager who agreed to a contract he should not have. That was not your fault. You signed it in good faith and you expect them to live up to their obligations.
Sure, you could sue in NYC small claims court; but you can't have an attorney or anyone not an officer of your corporation (if you are incorporated) appear for you. At least, that was the rule 25 years ago which was the last time I practiced in New York.
Re: NYC Business not honoring contract - how to collect
The NYC company cannot unilaterally decide not to pay you. You have a signed contract. Send them a demand letter for payment; if they don't respond, consider a collection agency. And if that fails, contact an attorney to send another demand letter out on the atty's letterhead. Chances are they'll relent and pay you rather than have to hire an attorney themselves. If that fails, contact the American Arbitration Association.
Good luck.
Re: NYC Business not honoring contract - how to collect
You should proceed through the arbitration provision of the contract.
If it is a standard AAA arbitration clause, under the commercial claims part of the AAA your appearance may not be necessary and arbitration can be conducted solely by paperwork. Information can be obtained at www.adr.org
Mike.
Re: NYC Business not honoring contract - how to collect
Make a pest of yourself; most likely they would rather get rid of you by paying the money owed than have to incur time and costs. A manager of a company has apparent authority to act on the company's behalf, and so the company should have to honor that contract unless the mangager's lack of authority was disclosed to you. Arbitration is an option, as is small claims if you can appear personally in New York (you or your company's employed representative). You might also be able to "make some waves" with a few letters from an attorney--letters should not cost too much. Depends on how much you want to spend to get back your $574.
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