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A client has asked me to return money he paid to have a product

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developed. The product is complete...
A client has asked me to return money he paid to have a product developed. The product is complete and has been working at his site. He still owes the last payment on the product.

Just before asking for his money back, he asked me for all the design files and manufacturing data that I provided in good faith.

The merits or demerits of the case may not be relevant. I did some background research on the person and he is an evil character. Essentially he is trying to get money out of me by threatening me. By talking to his employees I learnt that he does the same thing to all his suppliers.

His reason for asking for a payment is that the product failed a test conducted last December.

I don't think his case has any merit. But the thing is if he has a lawyer who will take his case on a contingency basis it may end up causing a lot of expense and hassle for me.

He is in Florida and I am in Maryland.
Submitted: 8 years ago.Category: Business Law
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Answered in 6 minutes by:
12/4/2009
Business Lawyer: Ellen, Attorney replied 8 years ago
Ellen
Ellen, Attorney
Category: Business Law
Satisfied Customers: 36,715
Experience: 25 years of experience helping people like you.
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Hello,

Thank you for your question.

Consider filing suit against him first in Maryland. Absent a provision in your contract to the contrary, jurisdiction would lie in either Florida or Maryland. Therefore if you file suit to collect the money that is owed to you in Maryland the best that he can do is countersue for the return of the other funds in Maryland.
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Customer reply replied 8 years ago
Thanks for your quick answer. I have a few follow up questions.

Would filing a suit involve a lot of money? Like many small businesses in this economy I exist on the edge of survival and have enough things to do.

He has paid about $85k and owes about $17K. It was a longish contract 2+ years and it took a lot of effort to get it done. We went out of our way to do things for him. The money he paid is long since gone on expenses and materials for the job.

We have strong written evidence saying that the product performs as expected. Do you think we would be able to find an attorney who will accept the case on a contingency fee? The attorney can keep all of $17K recovered.

Alternatively do you think I can file suit myself with minimum guidance from a lawyer just to make sure that I am doing the right thing?

My friends suggested ignore the guy. See if he actually files suit and then respond. They think it is just a ploy by him to avoid making the last payment.

Do you think it is best to file first? If we file in Maryland can he file a counter suit in Florida. The contract does not specify the state where any disputes will be resolved.

The best case outcome would be if I never see this guy again or hear from him. On the other hand I do not want to pay this guy anything. It is like being bullied in the school yard.

Is there a way to make these people aware that I

- intend to fight their malicious intentions hard
- really don't have much money
?

Once again thanks for your time. This is the first time in nearly 10 years of being in business that I have encountered this situation.
Business Lawyer: Ellen, Attorney replied 8 years ago
The purpose of filing suit first is to force him into the court in Maryland. He will need to include his counterclaim in the Maryland action.This will give you the hometown advantage of not having travel to Florida to litigate.if you ignore him and he chooses to file suit in Florida, you will need to defend the action in Florida at a much greater cost. I would not suggest that you file the action yourself. It may be worth your while to spend a few thousand dollars to bring the action in Maryland rather than risk losing $85,000.
Ellen
Ellen, Attorney
Category: Business Law
Satisfied Customers: 36,715
Experience: 25 years of experience helping people like you.
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