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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 22736
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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For approx ten years weve subcontracted the installations

Customer Question

For approx ten years we've subcontracted the installations of metal products for a metal fabricator. We had completed a 1/2 year long contract wherein they owed us 65k for our services (they were slow payers) on that project.
A new project loomed with them that we were to start immediately following. We informed the Fabricators that we could not again finance their jobs and that their performance payments had to be ontime (the job had to pay for the job). They let us know that they could not pay us for the the last job [yet] and that payments for the next (much larger job) would be hard to make.
After much discussion of our mutual abilities concerning the financing of their project we agreed that if they could pay us what they owed us on the last project in weekly increments of 7k then we would use that money to fund the initial stages of the project. However they would have to come up with 10 percent down(28k) over the first 60 days in additional to those payments. And upon receiving their first payment (approx 30-45 days later) from the project they would have to begin progress payments to us for our installations services on this new project every 2 weeks. As per our original agreement when bidding project.
After eights weeks of services they informed us that we were no longer installing this project because they were afraid that future expenses wud exceed what they bid the job for and that they had made a deal with the general contractor of project to assume install for them. Emphasis was given numerous times that all were happy with our work as had been the case for ten years with them, but that they could not afford the project and wanted to do a materials only contract [now].
our investment into this 6-8 month project (prepaying all long term lodging leases, r&d oninstall methodology specific to this projects conditions, labor and extras, was approx. 45k. Loss of potential profit was 90k. loss of income for labors was 180k.
all contracts have begun verbally for approx. ten years during bid phase, with totals and payments made/due on first invoice solidifying mutual agreement.

RECAP.... 8 weeks on project / no progress payments for labors / they missed payments contrary to agreement for last project / they did pay their 10 percent down was paid against prepaid lodging lease costs for [entire] project to us / no notice or inclinations given by fabricator or general contractor as to any issues requiring reworking of schelduling costing or need to terminate etc / all completed work competed was already authorized as complete with no redress required.

Is attempting to bring suit for this matter a waste of time.
is there any case against the general contractor for not discussing their plans to lltake over our contract.
Are there any other avenues we should be pursuing such as criminal or civil if the two parties acted in collusion to interfere with our contract to their benefit, collusion, interference etc. We are aware that being right is not necessarily the most important aspect of winning any judgment in any venue. Please advise.

thank you very much.
Mj
Submitted: 6 months ago.
Category: Business Law
Expert:  Law Pro replied 6 months ago.
Hi! My name is XXXXX XXXXX X'll be the attorney assisting you.

Sorry for your situation.

Do you think the company has any money?

Do they have any assets?

What is the company form - an LLC, partnership, corp or what?

In what state are they located - in FL like you?

Customer: replied 6 months ago.


hello.


the company is financially sound florida corporation, tho experiencing difficulty due to large projects and length of time they have to wait for their payments.


they own their factory and manufacturing shop etc.


we explored financing the entire job ourselves as an option to get them to reconsider their choice and spoke with a factoring company that having run financials on the company in question approved factoring if we decided to pursue that course.


in that we are not privy to much more of their private information than this it would be impossible to say for sure. However they have other upcoming large projects on their board, and additionally they presently have a bond on the project in question limiting any attempt on their part to seek bankruptcy to evade (though for such a small amount we sincerely XXXXX XXXXX to be something they would really consider.


Although they are obviously cash tight at the moment they go through periods of cash infusion and monthly payments against what they owe us should be well within their abilities (assumed)

Expert:  Law Pro replied 6 months ago.
If they are generally financially sound - then I would file suit against them.


I don't suppose in your invoicing or anything that you state attorney's fees and legal costs are recoverable if you have to file suit?
Customer: replied 6 months ago.


no we did not have any protective wording to protect ourselves.


we were friends and believed that if anything so untoward was to happen to negate that friendship status that basic law itself would suffice.


 


part of question was whether or not the other parties have any responsibilities in this issue.


thank you


 


 

Expert:  Law Pro replied 6 months ago.
You are talking about the general contractor who took over the installation?
Customer: replied 6 months ago.

Yes. the project has a general contractor that hired the fabricator to provide product and installation.


the fabricator uses us for their installations.


the fabricator and general contractor reached a decision to transfer installation to the general contractor.


thus alleviating the fabricator from continued weekly payments to us without risking loosing their bond on the project.


the general contractor benefitted in that they were running very far behind and consistently not ready for the installs which would've eventually led to additional costs by us to fabricator and from fabricator to themselves.


thanks for your continued effort to get to the correct answer for me.

Expert:  Law Pro replied 6 months ago.
OK. Now I understand. That wasn't as clear originally.

Yes, you would have a claim against them for tortious interference of contract and/or business relations.

That they conspired with the fabricator to breach your contract with them.

As such - they have clear liabilty in tort - not just contract law. In tort - you can get punative damages along with compensatory damages plus attorney's fees and court costs.

Tortious interference with contract rights can occur where the tortfeasor convinces a party to breach the contract against the plaintiff, or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff from receiving the performance promised. The classic example of this tort occurs when one party induces another party to breach a contract with a third party, in circumstances where the first party has no privilege to act as it does and acts with knowledge of the existence of the contract. Such conduct is termed tortious inducement of breach of contract.

Tortious interference with business relationships occurs where the tortfeasor acts to prevent the plaintiff from successfully establishing or maintaining business relationships. This tort may occur when a first party's conduct intentionally causes a second party not to enter into a business relationship with a third party that otherwise would probably have occurred. Such conduct is termed tortious interference with prospective business relations, expectations, or advantage or with prospective economic advantage.

In either of the above situations, the tortfeasor's conduct must be intentional. There is no cause of action for merely negligent interference with the performance of a contract. [Wikipedia]


The fabricator is liable to you for your loss profits from the job plus whatever your costs were.


Construction Contracts

a) Owner/general contractor's Breach Before, During, or After Construction
Contractor can recover:

(1) before construction: only profits (contract price, less cost of materials and labor); (2) during construction: profits, plus cost of partial construction;
(3) after construction: the contract price, plus interest.




I think you have a strong case against both the fabricator and general contractor for your damages.


Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer.. I thank you in advance for taking the time to provide me a positive rating!

If you have any questions, about this or anything else, please ask for me, Law Pro, directly in the question and I will try to assist you as best I can.

For example, you would state, "This question is for Law Pro . . . (then on with your question).

I wish you the best in the future.
Customer: replied 6 months ago.

I do have a follow up to the question involving 'was a contract in play' in that we verbally negotiated a price and the duties, submitted an invoice showing the agreed upon amounts, received and showed on invoice their deposit, and performed all duties requested of us until breach.

Expert:  Law Pro replied 6 months ago.
I do have a follow up to the question involving 'was a contract in play' in that we verbally negotiated a price and the duties, submitted an invoice showing the agreed upon amounts, received and showed on invoice their deposit, and performed all duties requested of us until breach.


Yes, absolutely. Verbal agreements are valid. It's actually very surprising but that is more then enough for a valid enforceable contract - way more!

Law Pro, Attorney
Category: Business Law
Satisfied Customers: 22736
Experience: 20 years experience in business law - sole proprietor, partnership, and corporations
Law Pro and 4 other Business Law Specialists are ready to help you
Customer: replied 6 months ago.


I see there are no areas to leave remarks.


however I would like to tell you that your taking the time to fully understand my queries before handing out a 'boiler plate' response was both honorable and informative....and luckily was what I wanted to hear so that was also a bonus.


I would use your service, requesting you, again.


thx


mj

Expert:  Law Pro replied 6 months ago.
Thank you! Yes, please ask for me - Law Pro directly in the question so I'll be sure to get it.

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