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TexLaw, Attorney
Category: Legal
Satisfied Customers: 4430
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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I am a technology consultant and have been working on a customer

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I am a technology consultant and have been working on a customer solution for over a year. 90% of the solution was reselling another companies technology (I'll call the Company A). I have been actively corresponding with two directors at Company A. They provided me quotes for the customer solution in both email and various conference calls over the past 8 months. The most recent quote and confirmation of price and delivery was less than a month ago.

Two weeks ago the customer awarded the contract and sent me a purchase order with a 3 year commitment as per the quote from Company A. In total my commission would be $31K. Since then I've had further planning meetings with Company A regarding the fulfillment of the contract. Yesterday, I was told by the CTO of Company A that they are backing out of the deal because they want to head in a different direction.

My question is, would a court hold them liable for my loss?

Thank you for your question.

Just to make sure that I understand your scenario, can you clarify the following:

1. Company A signed a contract for the sale of the "solution" with the customer?

2. Company A is deciding to breach that contract?

3. You were going to receive a commission off that contract?

4. Do you have a written commission agreement with Company A?
Customer: replied 4 years ago.

1. I've been working with Company A for several years and have other clients with them. I had a contract with the company that Company A acquired, but have not had a new contract drafted since the acquisition two years ago. However, I have continued to sell their solutions and receive commissions and updated reseller information.


Company A did not sign a contract for the solution yet, however they have been providing me price, time and delivery quotes for 6+ months on this particular solution.


2. Company A is backing out of their written and verbal quotes.


3. Company A was a significant part of the solution. The client would have paid me and I would have paid Company A their part. The difference (commission) would have been $31K over 3 years.


4. Not current. However, I've been receiving commissions for another sale using their technology.


Thank you for your insight.


Thank you for your response.

Without a written agreement stating otherwise, your right to a commission depends on the completion of the sale between Company A and the customer. Here, you have extended the offer of Company A to the customer, but Company A has backed out before the deal has been completed.

Thus, here the only company that may have any legal remedy is the customer, if the customer accepted the quote from Company A. Because you are a sales agent, you are not a third party beneficiary and thus have no rights to assert a breach of contract. Thus, your rights are not triggered here because you only become legally entitled to the commission if the transaction is completed.

One possibility that might exist for you is that the original commission contract may still be in effect. Contracts often contain language that says they will bind a party's "successor" in interest. If there is such language and there is no document which cancels the agreement, and the agreement has not terminated by its own terms because of the length of time, then it would still be enforceable. If that is so, then you could bring a claim for breach of the commission agreement in that Company A had a duty to you to act in good faith.

In order to make this determination, I would need to inspect the commission agreement. Do you have access to it?
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