i'm a california LLC - a web consulting agency - contracted to a delaware C-corp for some service work. they are unable to come up with the money owed ($28k). services were fully delivered.
there's an arbitration clause (in san francisco) in the contract. what are the pros/cons of exercising the clause? it's a one man show on both sides, so piercability on both sides is a concern.
please call with any questions XXX-XXX-XXXX
unsure if my previous reply was added, so i will add again. apologies in advance for any redundancy
reasons for piercability question:
- customer is a delaware c-corp, with possibly no money in the company
- what are options for actual recovery (ie $$ in my bank) in case of judgement for me
- do you know avg cost of arbitration for similar case in sf, ca
- can we recover arbitration costs n case of favorable judgement
Thank you for that additional information.
That does mean that the corporation veil will allowed to be pierced. Parties are allowed to contract - breach of the contract itself does not afford the remedy the court piercing the corporate veil.
The courts will allow the piercing of the corporate veil in extenuating circumstances - when there has been fraud, undercapitalization, not keeping with the formalities of the corporation, commingling of funds, etc.
But just because the corporation breached a contract - the presumption is - that a court won't pierce the corporate veil and hold the owners personally liable.
The rational is - that you knew who you were contracting with OR could have demanded personal guarantees.
Because it's a simple breach of contract - the arbitration shouldn't take long at all. I would have to say between $2k and $4k.
No, not unless it's in your contract that the prevailing party can recover their legal fees and court costs. Otherwise, in the USA - unless there is some statute saying the prevailing party can recover their attorneys fees and court costs - each party bears their own costs.
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