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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 111449
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I work 1099-misc we will call company 1. Company 2

Customer Question

I work 1099-misc for what we will call company 1. Company 2 handles all invoices and payments for company 1, so if we bill out any work company 2 takes 25% of our check and pays us bi-weekly, according to our contract. One of the clients we are doing work for filed for chapter 11 bankruptcy meaning they are late on paying company 2. Company 2 now takes out 1000 dollars every month on top of the 25% without my permission, and with no paperwork involved. On top of that they are trying to force me into renegotiating the contract for the office, and supplies they provide us as part of the contract of them receiving the 25% of our check. Even though the contract states he must give us a written warning 6 months in advance if he chooses to cancel his contract. Is there a way for him to kick us out of this building, and is it legal for him to withhold pay he is contractually obligated to pay me?
Submitted: 7 months ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 7 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Company 2 cannot take any more from you than your contract provides. If all your contract provides is for company 2 to take out 25% for invoicing and handling payments, that is all they can take. You are under no obligation to sign a new contract and actually, if he is taking money beyond what the contract calls for, you can terminate the contract for breach if he will not cure that and return the money. He cannot kick you out though as long as you have that contract in place and he cannot make you renegotiate.
Customer: replied 7 months ago.
Thank you for your help, I have a few more questions for you.
1. Company 2 claims since we are 1099-misc contract he can sue us for money he paid and has not received from the bankrupt company that the services were provided for. Company 2 has the MSA with the bankrupt client. Can he sue the 1099-misc workers for company 1, or can he only sue Company 1, the company with the contract. The contract only mentions the name of Company 1 and its heirs and asigns, but not anyone who does work on the Company's behalf.2. Company 2 is demanding 3000$ a month from Company 1 and says until he gets the debt outstanding invoices from the bankrupt customer. Company 2 is also continuing to decline payment unless these conditions are met.Also if you would like a copy of the example contract, I will be happy to send it to you.
Expert:  Law Educator, Esq. replied 7 months ago.
Thank you for your reply.
Company 2 can charge you only for what the contract says they can charge you for. You need to read your contract to determine whether or not he can bill you for it, especially in light of the fact he has an MSA with Company 1. If you are contracted with Company 2 to handle billing and payment to you only, then if he does not get paid by Company 1 he should not pay you if he did not get the money from Company 1, but charging you for it would have to be based in contract.
2) Again Company 2 does not have to pay you if the agreement is they collect from Company 1 and pay you from what they collect, but certainly they cannot charge you unless your contract with Company 2 says they can charge you if Company 1 does not pay the invoices.

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