Legal Question in Business Law in Ohio
We ( an Arch. Firm) have a Contract with a Client for Prep. of Construct. Drwngs & assist in obtaining Plan Approv.
Cost per hour given and Billing will be submitted periodically in a timely manner in accordance to amount of time spent to keep client current and updated. Client signed Contract and we did drawings up to a point , billed them for work done so far, Client did not answer calls nor paid bill. After months turned over for collection. Collection Agcy says they can no longer pursue because of lawyer involvement by Client . Client still refuses to pay and says will counter sue if we try to get $. They state they did not get completed drwgs. They did not because they never paid "periodically" Do they have a leg to stand on?
3 Answers from Attorneys
This boils down to the terms of the written contract. If your client has a lawyer you should get one too. Moreover, your lawyer can review the contract to see whether it can be enforced. Otherwise you will be at a great disadvantage if legal proceedings are begun.
Based on what you have stated, it sounds like the former client is trying to intimidate you into not pursuing the money you were owed. It is hard to know exactly what options they have though without knowing more about the situation.
The first place to start is looking at the contract. You mentioned that billing would be periodic. Is there anything in the contract that states how long they had to submit payment, or what circumstances would allow you to stop working due to a failure to pay? If either of these things are referenced in the contract and you did not follow any set procedures exactly, they may be able to argue that you didn't fulfill your duties. Is there anything in the contract that says the client gets the product no matter what?
If the contract doesn't cover these situations, then you will probably have to turn to general contract law. A failure to pay is generally considered a breach of the contract, especially if the contract calls for periodic payments. In that case, you would be entitled to payment for the work you performed. In exchange, the client would probably be entitled to whatever work you have completed at this point. That might be their counterclaim point.
Ultimately though, the only way to determine the strength of your client's position is to look at the contract and get a complete picture of the situation. For that, you are best off seeking an attorney. He or she can explain the strengths and weaknesses of both your and your client's positions and if you do decide to pursue the owed money the attorney can represent you in that.
I hope this provided some guidance into what issues are out there in your situation. If you have further questions or would like to discuss your situation in more detail, feel free to contact me.
It is very common for the client in this situation to suddenly find fault with the work. This "defense" is meant to leverage how you don't want to get sued. I recently represented a contractor who did work for a homeowners association. The HOA wouldn't pay. When we sued, they countersued for alleged breach of contract for poor workmanship. It didn't work and we got paid. I would be glad to talk and/or meet with you for a free initial consult.
Vaseem S. Hadi
513-381-9216
www.rendigs.com
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