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Sam, Attorney at Law
Category: Legal
Satisfied Customers: 27009
Experience:  More than 20 years of experience practicing law.
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I have a business to business contract with another company.

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I have a business to business contract with another company. They are currently grossly in breach of contract but we have an arbitration clause. A number of my companies claims are violations which are not covered in our contract, some of which are violations of terms covered in the contract.

So, my question is, because a significant violation has occurred that is not a covered dispute contractually, am I still bound to arbitration to resolve it?

Welcome and thank you for your question I am an attorney with more than 25 years of experience and I look forward to providing you true and correct information in this regard.

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Yes, you are still bound to the arbitration because the only thing you can base a breach of the contract on are violations in the terms and conditions in the contract.
Customer: replied 3 years ago.

Yes, that makes sense but maybe I did not ask the question properly.


in addition to the material breach of contract - this company requested extension of services from my company (some of which may be intellectual property) whose compensation is not covered by the contract but gave promises of a new contract negotiation.



Now, the company in breach, has requested us to stop doing business preventing us from seeking compensation from these extension of services and they are refusing to renegotiate a new contract. Them asking us to stop immediately is the breach of contract, however the compensation loss here extends beyond the compensations covered in our agreement.


Does my question make sense?




And thank you

What you have still is a situation of a breach of contract. And the extension is a verbal. There is no law that says a contract has to be re negotiated

I suggest the arbitration is still mandated. Then if there is a matter where you are being hindered in being able to conduct business because of another reason, then you can sue based on that. But you have to begin with the arbitration.
Customer: replied 3 years ago.

Can you explain this "Then if there is a matter where you are being hindered in being able to conduct business because of another reason, then you can sue based on that. But you have to begin with the arbitration."


There are a number of reasons where I am blocked from doing business. What qualifies as a 'another reason' and how would that allow me to sue? Not sure I understand your answer. thanks for the help so far.


if it helps I can chat on cell or skype.


Well, you cannot be blackballed and it cannot be based on defamation.

If some verbal agreement is keeping you from doing business than that is not something that can be enforced by either of you without court action.
Customer: replied 3 years ago.

Sam - still do not understand :(


Not sure what you mean by 'black balled' or what the 'it' is that cannot be based on defamation.


You said there are things outside of the contract that are stopping you from doing business.

What are those things?
Customer: replied 3 years ago.

1.)Company asked me to develop product for marketplace. Product is now companies lead focus. This is not covered by the terms of my contract I just have a sales agreement- but agreed to do it because my contract is of a sales nature and commissions from selling product would be extensive and I was promised sales exclusivity + equity in top line talking points before re negotiation.


2.)CRO of company has systematically been blocking my sales efforts (my only chance to recoup) and has now informed me he is leading sales with this product.


3.)I have now been asked to disengage immediately, which is not only a violation of contract, but prevents me from finding compensation on product development that was never covered in our agreement.


There are other violations, but that is the core argument that is supported by written email exchanges between parties


Thank you

And that would all be used in arbitration. If there is nothing in your contract covering these items, that does not negate the mandated arbitration. However, you can bring this up and try to reach a resolution to it.

Either way you cut it, the arbitration is necessary
Customer: replied 3 years ago.

THank you sam! I am going to give you a good rating - but I also have one or two additional questions about the arbitration process in general. Can I rate you now and continue to ask you a few more questions? I just signed up for a membership premium after I requested your services so I assume that is covered, yes?


Yes, however you care to do it.

You can rate or wait until all your questions in this regard are answered.
Customer: replied 3 years ago.

oh nice :) never used this service before and my attorney is till on vacation and trying to wrap my head around this.


okay, so here is my question regarding arbitration. It's a business to business contract, I have a corporation in CA, they have an LLC in NYC.


Is binding arbitration here something I should be worried about or does it limit or hinder my progress is seeking restitution as a volume loss seller?


I have received no compensation or salary from this company and agreed to enter into this relationship on a commission only basis and share the risk, since they are a start up. I actually have taken a financial loss.


They have big money behind them. You can see that them canceling this agreement and thus removing my ability to find compensation for 9 months work (we were unable to go to market until July 1st) is upsetting.


There is clear evidence of the breach and everything i mention here, I just need to know if the arbitration process limits my ability to maintain a strong position from a legal perspective working this through with them.


The Arbitration is binding. But it can also be appealed on points of law. I suggest that it is a fair process. It is one that is similar to a court action but less expensive. And the Arbitrator will be an objective 3rd party and so I suggest it is not a hindrance.

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