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TexLaw
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4164
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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I need advice regarding a business loan and the statute of

Resolved Question:

I need advice regarding a business loan and the statute of limitations
Submitted: 1 year ago.
Category: Legal
Expert:  TexLaw replied 1 year ago.
Hi,

Thank you for contacting us.

What is your question exactly?
Customer: replied 1 year ago.

I was given 23,000 in 2005 to produce a movie. Several attempts were made to complete the project, at which time in 2008, any further attempts were ceased.


 


The owner of company is now threatening legal action claiming 18,000 is owed.


 


Do any statue of limitations affect this claim?

Expert:  TexLaw replied 1 year ago.
Were you given the loan pursuant to a written contract?

If so, when did the contract state that payment was due on the loan?

Did you ever make any payments on the loan?

When you say the owner of the company, is this the company that gave you the loan?

Why do they only want $18K back instead of the entire $23K?

Are there any terms in the loan agreement which state that repayment is contingent on successful completion of the movie?
Customer: replied 1 year ago.

Written contract-I believe so, but, it could have been oral. There is probably email documentation of the agreement, but, I never signed anything.


 


I never agreed to a due date, and repayment came in the form of a completed movie/project.


 


I never made any payments on the loan. I did, however, produce footage that he accepted (in 2005), which was part of the movie.


 


Yes, the owner of the company gave me the loan (to fund the production which he ultimately would have owned. I was an independent contractor to him)


 


18k=23k minus costs of footage he accepted.


 


No terms on the loan stating any repayment. If movie had been completed, that would have been the repayment.


 


 


 


 

Expert:  TexLaw replied 1 year ago.
Thank you for your response.

You have several defensive arguments here.

1. Statute of limitations

The statute of limitations in California on a written contract is 4 years from the breach and on an oral contract is 2 years from the breach. It is arguable that the breach occurred in 2008 when production on the project stopped. Thus, in either case, the statute of limitations is exhausted and the case is barred.

2. Non Recourse Loan

The second argument that you have is that the loan was a non-recourse loan. In other words, by its own terms, it was only going to be repaid out of the proceeds of the project. Thus, you would not be personally liable for it. He took a risk by lending the money to you like this and must bear the risk of loss himself.
Customer: replied 1 year ago.

Over the course of the years, up until recently, out of "guilt" I tried to set up payment plans with him. I believe I even agreed to a 10k settlement.


 


He never directly acknowledged my offers. It seemed to always be up in the air with him. Until recently, when he said he would drag me into court.


 


Do these communications hurt me in anyway?


 


If I want to "settle" to preserve my reputation (I have no problem giving him 5k) does this open me up to any future claims from him because i am accepting responsibility? Ultimately, I'd like to do the right thing.


 


 

Expert:  TexLaw replied 1 year ago.
Yes, this does change things. An acknowledgement of the debt restarts the statute of limitations. Did you make these offers in writing?

Customer: replied 1 year ago.

I did. They were done through email.


 


I don't know when. I'm assuming I need to know the date of that to see when statute of limitations begins.

Expert:  TexLaw replied 1 year ago.
Yes. It will be from the date on the email.

In regard to settlement, I think you need to check out whether the statute of limitations has run. I think you also need to make a determination of whether there was a writing which contained the terms of the loan. In other words, if you believe that the terms were in an email, then you need to locate the emails so you know what you could be liable for.

Once you have that information gathered, assuming that the statute of limitations has not run, you should make a verbal settlement offer on the debt.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best regards,
ZDN

TexLaw, Attorney
Category: Legal
Satisfied Customers: 4164
Experience: Lead trial/International commercial attorney licensed 11 yrs
TexLaw and 20 other Legal Specialists are ready to help you
Customer: replied 1 year ago.

How much would you charge me to help me directly? Can that be done, or must be done through here?


 


I want help proceeding forward.


 


 

Expert:  TexLaw replied 1 year ago.
Thank you for the positive rating.

I can only help you through here. I cannot directly represent you and we cannot form an attorney-client relationship.

If you need further help in an informal way as far as guidance on this matter, just submit a question through my profile to me. Start the question with FOR ZDNLAW ONLY. That way the other professionals on the site will know the question is intended for me if I don't pick it up right away.

I look forward to serving you in the future.

Kind regards,
ZDN
Customer: replied 1 year ago.

ok thank you

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