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I have a question regarding contract law. The contract is…

Hi - I have...

Hi - I have a question regarding contract law

Lawyer's Assistant: What state are you in? It matters because laws vary by location.

The contract is between a company in South Carolina and a company in Hawaii

Lawyer's Assistant: Has anything been filed or reported?

No

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Answered in 1 minute by:
10/26/2017
ScottyMacEsq
ScottyMacEsq, Attorney
Category: Legal
Satisfied Customers: 18,093
Experience: Licensed Texas General Practice Attorney
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Customer reply replied 6 months ago
I just realized I didn't write it out...)My company (located in Hawaii) began a project with a manufacturer in South Carolina. The project timeline was 4 months, and we've paid them $130,000 (75% of the project budget) according to the payment schedule.We are currently 2 months PAST when the project was supposed to be completed, the work is - maybe - 30% done, and they just informed us that they've run out of funds – even though the FULL scope of the project should have been covered with the funds provided.Based on the above, we feel that we have grounds to sue for breach of contract, misappropriation of funds, and even fraudulent misrepresentation (they represented capabilities that they ultimately didn't have) – however, looking back, I discovered that the actual service agreement was never signed by both parties.This was clearly just an oversight (as both of us have been operating under the terms of the agreement), but I'm wondering what the implications of this could be during litigation. Money was paid and services were initiated – can the agreement still be considered to be valid and in effect in practice?Thank you kindly for the help.

Thank you for that additional information. Please give me a few minutes while I type a response. I am still here with you, but it does take a bit of time to type a complete response.

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Customer reply replied 6 months ago
Just to add – they drafted and sent the service agreement to us, we signed it, but we never received a copy with a signature on their end.
Customer reply replied 6 months ago
Is the fact that they drafted and sent us the terms indicative of their implicit acceptance of it?

Yes, it's certainly clear that there was an agreement in place, and if it's assumed by both parties that the terms of the agreement are spelled out in the written agreement itself, then the actual lack of a physical signature is not going to be "fatal" to such a case. In any event, even if there WAS a defense to this, then that simply means there's no contract and they have to return the $130,000. They don't simply get to "keep" the money.

As far as their drafting, that's certainly a good argument to bring up. That is, you signed the agreement that was sent to you and they started working per the terms of the agreement. So yes, that's a very strong argument. It would be difficult to argue that the lack of a signed contract is somehow a defense on their part.

That being said, you need to contact an attorney in your area that deals with breach of contract cases. Go to www.lawyers.com or www.legalmatch.com to find an attorney in your area. You should be able to find one that will give you a free initial consultation and better advise you of your rights, any problems with your case, likelihood of success, how courts are treating cases such as yours in your area, and what you should do next.

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable.

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Customer reply replied 6 months ago
Hi,Thanks for the quick response. What would be the state to pursue this in? Hawaii or South Carolina?Also – related – from what I've read, fraudulent misrepresentation is something that bankruptcy cannot discharge. Is this true? They company is close to broke (that's why they used up our funds, to plug other holes) and will likely declare bankruptcy if we legally pursue them. Is there a way to prevent them from doing this and essentially making out with our $130,000?

Fraud is certainly something that cannot be discharged. As far as what state, the best practice is to use the "choice of law" / "choice of forum" clause in the written contract. Treat the written contract as though it's operative. So if it says South Carolina, do it is South Carolina. But the key here is to act quickly so that the attorney can put a stop to any such situation, and potentially seek a "freeze" on any assets (if that's a substantial possibility).

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Customer reply replied 6 months ago
The service agreement is extremely thin... It barely has any information contained (my fault for not requiring more depth). I've attached below.Is this sufficient to work off of and base our case? (In addition to the copious email correspondence showing their non-performance and failure to deliver)

Yes, I believe so. Now if everything was to be done in SC, then it's likely still there that you'd have to bring a case. So look for an attorney in the area where the defendant is.

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If you feel that I have gone above and beyond in this answer (my average answer is about 10 minutes) bonuses are greatly appreciated. Thank you, ***** ***** luck to you!

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Customer reply replied 6 months ago
Got you. Any last words about what to expect in such proceedings if we pursue them? How long it takes, what information or things we would need to furnish, what would need to be proven for the fraud charge to stick (I don't have any telephone recordings of them promising us their capabilities or anything...)

It could take a while, especially at the over-$100k mark. But they also might settle, so I don't even want to start to give a time estimate. THe key is to get a lawyer in SC that handles business litigation matters, as he'll be able to give you better jurisdictional information, how courts are treating cases like these in the area, etc... as well as what information will be needed.

ScottyMacEsq
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Satisfied Customers: 18,093
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Customer reply replied 6 months ago
Thank you. I appreciate the help!
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