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legalgems, Lawyer
Category: Legal
Satisfied Customers: 7113
Experience:  Just Answer consultant at Self employed
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I paid a restaurant consultant money to help open a

Customer Question

I paid a restaurant consultant money to help open a restaurant. It never went through. I've changed my mind. I signed a contract but nowhere does it state "non refundable". We never went as far as even looking at properties. I met him only once. We have emails back and forth, and that was it. Im not saying it's his fault, but I no longer want to move forward and a few emails does not warrant such a big payment. Can I get my money back even if I signed a contract?
Submitted: 7 months ago.
Category: Legal
Expert:  legalgems replied 7 months ago.

How long ago was the contract entered into?

Was any portion of the contract performed?

was there a liquidated damages provision?

Customer: replied 7 months ago.
October 2015.He only came up with a business plan. Nothing else.Can you explain liquidated damages provision? Can I send you the contract?
Expert:  legalgems replied 7 months ago.

Unfortunately I cannot review legal documents as that requires a private attorney client relationship. I can only provide legal information; would you like to continue?

Customer: replied 7 months ago.
we can. I looked up liquidated damages clause. So you mean was there something in the contract that says I owe him if it doesn't go through? Then no.The contract states I pay him $8000 to start. And then 6 monthly payments of $7000 after that to reach a total of $50k for his services. I never made any other payments since I started feeling uneasy.We met only once in October when he charged me. I never saw him again. We emailed a lot saying I wanted to move forward but nothing ever happened. I never even met with a leasing broker to look at properties.The contract only states what he offered mainly. On my part where it says "client agrees to: ***** *****" is pretty much all it says.Like I said, $8000 is a lot of money just for emails
Customer: replied 7 months ago.
I've worked in loans and sometimes we would do a ton of work and have detailed contracts saying "no refunds" but we still always had to refund them even if it was as little as a $100 payment. I know it's a different industry but I'm sure there has to be something that protects me in this situation as well. I put the $8000 on my American Express and am disputing it but I know they can't do much
Expert:  legalgems replied 7 months ago.

Thank you for that.

An agreement must contain four essential elements to be regarded as a contract. If any one of them is missing, the agreement will not be legally binding.
1. Offer
2. Acceptance
3. Intention (meeting of the minds)
4. Consideration (fair value exchanged)

For breach of a contract, there is a material breach (goes to the very heart of the matter) and an immaterial breach (money damages will help compensate the plaintiff).

In cases of material breach, the party not in breach may revoke their acceptance, so goods/payment are returned.

For immaterial breach, the plaintiff is compensated by the defendant paying for the damages (ie cost of repair).

So there is something called "partial performance" where one party only performs a portion of the contract (ie the business plan). Partial performance is considered by evaluating the following factors:

  • The extent the injured party receives benefit under the contract that the injured party has reasonably anticipated;

  • The extent the injured party may be compensated for the damages incurred because of the breach of the contract;

  • The extent the breaching party has already performed or has made preparations for performance.

  • The level of hardship on the breaching party;

  • The willful, negligent or innocent failure to perform by the breaching party;

  • The level of uncertainty that the breaching party will perform the contract.

(Credit card disputes are usually limited to those opened within 60 days of the payment; but that varies by credit card issuer).

So in a partial performance case, the court will try to determine what, if any, compensation the breaching party would be entitled to. For example, would a business plan be worth $8,000, or was that paid in anticipation of future work?

If it is necessary to hire a third party to compose a new business plan because this one is not satisfactory, then that could be cause for the court to void the entire contract.

As for future payments, if no services are rendered, there would be a breach and thus no obligation to pay future payments.

There is anticipatory repudiation that covers that issue and this is codified; please see the civil code below:

1439. Before any party to an obligation can require another party to perform any act under it, he must fulfill all conditions precedent thereto imposed upon himself; and must be able and offer to fulfill all conditions concurrent so imposed upon him on the like fulfillment by the other party, except as provided by the next section. 1440. If a party to an obligation gives notice to another, before the latter is in default, that he will not perform the same upon his part, and does not retract such notice before the time at which performance upon his part is due, such other party is entitled to enforce the obligation without previously performing or offering to perform any conditions upon his part in favor of the former party.

So generally, because there are ongoing issues it is best to retain an attorney to write a demand letter, requesting a refund for monies paid (deducting the reasonable value of services rendered to date, if any) and a written agreement terminating the contract.

If one wishes to pursue the underlying business venture, however, and retaining another individual in the same capacity would cost more (of comparable experience, reputation, etc), then the plaintiff may sue for the "benefit of the bargain" - ie the difference between the cost of this contract, and the new replacement contract - so that plaintiff is made whole by defendant's breach.

Customer: replied 7 months ago.
This is not the actual contract but his sample he sent me before we started which is basically the same without all my personal information.I know hiring an attorney will cost a lot. Do you think I have a good chance of getting my money back? Should I look into it? Or will this be more headache and not worth fighting if I will lose? Thanks
Customer: replied 7 months ago.
Also, if I did take this further to court I would never owe him the full $50k, right?
Expert:  legalgems replied 7 months ago.

I really am not able to view those documents as even samples are considered personal legal documents.

I would urge you to hire an attorney because as you stated, $8000 seems like a lot of money to pay just to have the venture stop, with no further contact.

Small claims does not require an attorney and is for cases less than $10k that is appropriate; but they could counter sue for the remaining which would bring it in to general civil court which is a more complicated process.

And yes, that is correct, once a court reviews and issues an order, it is barred from future litigation under res judicata/collateral estoppel doctrines.

Customer: replied 7 months ago.
What kind of specific lawyer should I look up?
Expert:  legalgems replied 7 months ago.

A business law attorney, or a contract law attorney:

Please see:

Expert:  legalgems replied 7 months ago.

I hope the above information was useful.

Please don't forget to rate positively- this does not result in additional fees, but allows the site to credit me for researching this for you.

Thank you- it is most appreciated! take care.

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