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AttyHeather, Attorney
Category: Business Law
Satisfied Customers: 677
Experience:  Attorney with 15 years experience
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One of my start-up businesses is a Mobile Laser Tag company

Customer Question

One of my start-up businesses is a Mobile Laser Tag company under the name Total Action Games, LLC (TAG). The company offers interactive gaming parties. Our main equipment is specialized indoor/outdoor high-tech Lasertag guns, receivers, targets, etc. We have sourced almost all of our equipment from a company called E-COMBAT. I'm having some difficulty with this suplier and need some legal advise to determine what my options are. In summary, the supplier promised a "technology upgrade" as a condition of me buying the original equipment (a start-up package arounbd $30K) in late-2015 & 2016. They have not delivered on their promise and have now gone silent after many subsequent promises to deliver. E-COMBAT HQ is in the UK but they have a "North America Distributor" in the US (MA) that they require me to communicate through. The only feedback I can get from the local guy is "they are working on it". That has gotten old after 1.5 yrs. I wrote to the CEO "Paul Diamond" in the UK last week but haven't heard back from him either. My suspicion is that they have turned their back on my company because they now know the upgrade would cost more than anticipated back when we contracted the original purchase. NOTE: The original start-up investment contract had a $2,000 withholding that is due on shipment of the "new technology". However, that was a negotiated amount that does not reflect the value of the upgrade (which is over $8K based on current pricing listed by ECOMBAT on their web site), nor does it reflect that fact that I would have never paid a penny without a guarantee of the "new technology" upgrade.
Submitted: 6 months ago.
Category: Business Law
Expert:  AttyHeather replied 6 months ago.

Hi! I'm Heather. I've been a practicing attorney for the last 15 years, and I'd be happy to assist you for informational and educational purposes.

Expert:  AttyHeather replied 6 months ago.

It sounds very frustrating that this company is refusing to cooperate with you on giving you the upgrade that they promised. What was your legal question - as I did not see it in the information where you described the situation?

Customer: replied 6 months ago.
Hello - Sorry for the delay in getting back to you, and sorry for not being clear about my legal question. My question is what are my legal options regarding this supplier? Since the initial purchase included the guarantee of providing the upgraded equipment, I would have never signed or paid for any equipment at all if I knew that they would not follow through. I have invested over $50,000 with them (including that initial purchase).
Expert:  AttyHeather replied 6 months ago.

It sounds like you might need to sue them for breach of contract and unjust enrichment. I can see right off that there might be a jurisdiction issue.

I am concerned that you may have signed a contract with this company waiving your right to sue them in the US. You will want to first look at your contracts with them to see if there is any type of provision where you waived the right to sue in the US (or even in your state). Look to see if there is a provision on choice of law jurisdiction. Does it state that if there are any disputes, the UK courts will have jurisdiction? Hopefully not, because you, being in the US, will want to avail yourself of US courts. If your contract is silent, then you will not be found to have waived your right to sue them in the US. If they have a US facility, it is possible that the "choice of law" provision may state that there is a certain state where you have to sue, so keep your eyes looking for a limitation of suing in a specific country and/or state.

Hopefully, if there is not a provision where you waived the right to sue in the US, the company location that is in the US is somehow registered (there's a good chance that they have a registered agent in the State where their US office is located). Depending on how many contacts they have with your state (the more the better), will determine whether you can sue them in your state, or whether you have to sue them in the state where they are located. It is not a cut and dry question. This type of jurisdiction is a complicated issue, and if they fight jurisdiction, there's a chance you could spend thousands of dollars just trying to litigate the issue of where you are allowed to sue them.

That being said, based on your fact pattern stated in the question, I do believe you do have a great breach of contract case, and a great unjust enrichment case. The jurisdictional issues will just be where the hitch is.

Does this make sense?

Customer: replied 6 months ago.
The original sale/contract was very brief and nothing about the ECOMBAT policies, jurisdictions, or other terms were discussed other than what I had them write on the invoice itself, at the bottom. The contract included a payment schedule: $13K due at time of placing the order, $18,824.90 due at the time the equipment was shipped from factory, and $2K due when shipping the new software/hardware upgrades (with the quote "3-9 mos?") written.That initial payment of $13K was made in early 2015. The second payment was made in May 2015 and done through a new invoicing tool they implemented some time between those two payments. They started attaching a "STANDARD TERMS & CONDITIONS OF SALE" 1-page .doc file to Emails that contained invoice notifications out of Quickbooks starting in May 2015. That is when the USA distributor, whom is the only ECOMBAT distributor in North America and located in Massachusetts, changed over his business to using Quickbooks.It's so discrete that I didn't even notice it until some time in 2016. There was even an email exchange about it so I could find the exact date that he first brought it to my attention and I contested it stating that I never saw, acknowledged, or agreed to that document. That particular discussion was about a different topic, but was the first time I heard of the "conditions of sale". On the footer of the doc there is a line reading "STCoS ECW 2013 V1.2". So it's possible that the UK company had it in place but the distributor never told me about it or shared it with me.The following is an excerpt from the "STANDARD TERMS & CONDITIONS OF SALE" document that I see as far back as 5/26/2015 Emails coming from QuickBooks.STANDARD TERMS & CONDITIONS OF SALE
14.1 We may cancel the contract or reduce the quantity of Goods to be provided if it is prevented from providing the goods through any circumstances beyond its reasonable control.
15.1 The Contract shall be governed by English law and the parties shall submit to the non-exclusive jurisdiction of the courts of England and WalesI can find no registration of the deal or ECombat when I did Department of State searches in MA, where the distributor lives and works. They have an 'operators' page so I could find other people he sold to, but in general, its a low-volume business and its probably just a few sales in each state, scattered around.I should note that I recently sent an Email directly to the owner, Paul Diamond, about this issue and asked him if he has any intentions of fulfilling their obligations. No response. Waited 2 weeks, asked again, no response. Clearly they have written me off and it leaves me essentially abandoned as an owner of $50K in equipment proprietary to his company (not to mention the other business expenses to-date).I can't even launch the business at all if the corporate entity has abandoned me because suppose I need support, warranty, maintenance, etc?Ca I sue the guy in MA whom all the equipment was delivered to & set up/configured, before it shipped to me? His name and address is on the invoice, not a UK address or name. I hindsight, I can't even understand how he could have received my payment because he doesn't even have a DBA registered in MA with the company name that is on the invoice.
Customer: replied 6 months ago.
Expert:  AttyHeather replied 6 months ago.

Unfortunately, I think if you sue in MA, you aren't going to end up getting the result you want. This is because, if you get a judgment in MA, you'll still have to enforce it in the UK. When you try to do that, he will block you enforcing the judgment stating that it is a void judgment since it was issued by a US court. And that's if the lawsuit is not kicked out by the US court, which I think it probably would be once the court reads that portion of the contract. I'm sorry because I know it's not what you want to hear, but it wouldn't do you any good for me to give you a different answer just because it's what you want to hear. If it were me, I'd probably see about retaining an attorney in the UK. Sorry.

Customer: replied 6 months ago.
Thanks for the honest feedback. I certainly want correct answers even if they are not in my favor.
Given the fact that the "terms of sale" document was never presented to me until after I had made the initial payment on the contract, does it have any effect? It doesn't seem 'right' that a seller can impose rules that they create for their own self-interest AFTER collecting money from the customer. Wouldn't I have to be presented with such information prior to the sale?Is the local dealer basically off the hook and allowed to continue profiting off US consumers with these deceptive business practices? It would seem like there should be some way to stop this from happening in the future without have to jump through hoops in the UK.
Customer: replied 6 months ago.
Customer: replied 6 months ago.
ping again...
Customer: replied 6 months ago.
ping again again.. still no feedback yet 3 emails to rate the answer

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