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I'm a General Contractor who just recently did some work for…

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I'm a General Contractor...

I'm a General Contractor who just recently did some work for a client on two properties he is leasing. The work was approved, I have documentation to back everything up, and I paid my subs. However my client wrote me a large check which bounced. He claims that he is going through a divorce and somehow his ex wife had her attorney file a claim which froze his assets and that is the reason why the check bounced. In the meantime this is causing me all kinds of havoc. I subsequently bounced two checks to my subcontractors as the bounced check pushed my business account negative. My client keeps reassuring me that he will pay me but here I am still without the money.

Lawyer's Assistant: When we are ready I'll take you to the appropriate web page.

Ok.

Lawyer's Assistant: Because family law varies from place to place, can you tell me what state this is in?

Family law? This is a real estate question.

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

Not yet.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

No. Its in Illinois

Submitted: 7 months ago.Category: Legal
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Answered in 4 minutes by:
11/27/2017
Lawyer: Legal Eagle, Lawyer replied 7 months ago
Legal Eagle
Legal Eagle, Lawyer
Category: Legal
Satisfied Customers: 13,331
Experience: Licensed to practice before state and federal court
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Hello! I am a licensed attorney, admitted to practice in state and federal court. I have a nearly 100% satisfaction rating (click here for more info) so all that means is that you can count on me to help today. Because I want to provide you with the most accurate answer possible, do you mind if I take a moment to review your question?

Please keep in mind that our conversation does not include an attorney-client relationship and this is for general information purposes only.

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Customer reply replied 7 months ago
OK
Lawyer: Legal Eagle, Lawyer replied 7 months ago

Great, thank you! Bear with me a moment while I review…

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Customer reply replied 7 months ago
Sure
Lawyer: Legal Eagle, Lawyer replied 7 months ago

Thanks so much for your patience. This appears to be a breach of contract based on the failure to perform within a reasonable time because the checks have bounced on multiple occasions. Courts regularly look toward the Uniform Commercial Code as their guide, since many states have adopted this code into their own statutes. Under UCC Section 2-309(1), the law says that each party has a reasonable time to perform if it is not expressly stated in the contract. What is considered “reasonable” is a matter of fact and depends on the circumstances, but it is an argument that you would have to make that it is unreasonable. Regardless, there is a legal basis for your particular claim. There’s a site that I’ve used in the past where you can find a good template for advising of a breach of contract. It's a bit easier (and cheaper) than going through litigation and I have seen it be effective in the past. If this doesn’t work, sadly, the only other option is to either go through an informal mediation or file a lawsuit in your local court. This website is also pretty cool because they have some state-specific breach of contract forms that you can use as well. Click here to choose your state started.

What other questions did you have for me?

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Customer reply replied 7 months ago
I never stated that the checks bounced on multiple occasions. What I said is that he wrote me a big check which bounced. This big check which bounced caused me to in turn bounce checks from my account. He wrote me a check for $8700 which bounced. In my contract with him he has 7 days to cure any default. He is way past that now. Check was written on Nov 6th.
Customer reply replied 7 months ago
Additionally he wrote two more checks, one for $50,000 and another for $28,000, which the banks could not verify because he lacked the funds to cash those as well.
Lawyer: Legal Eagle, Lawyer replied 7 months ago

I'm sorry, I thought you had mentioned multiple checks bounced. Regardless, the same cause of action for breach of contract applies whether it was one check or multiple checks. I'd recommend sending him a letter explaining that he is risking a civil lawsuit and I would set a firm deadline for him to pay or negotiate a new payment schedule, similar to what any other creditor would do to help secure their funds. What other questions did you have for me?

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Customer reply replied 7 months ago
The last two checks I didn't deposit because I had a feeling something was wrong when he bounced the check for $8700
Customer reply replied 7 months ago
your opinion is that this (taken at face value of course) may constitute breach of contract? Am I also entitled to file mechanic's liens on the properties, even though he is a tenant and does not own them?
Customer reply replied 7 months ago
He keeps telling me he will pay me and keeps claiming that its waiting for "bank process" so his funds can be released. What is so difficult for me is that I don't know if this is him just lying or not.
Lawyer: Legal Eagle, Lawyer replied 7 months ago

I'm sorry to hear about your situation. In my opinion, the answer is yes, this would constitute a breach of contract. You won't be able to get a mechanic's lien on the tenant, only on the landlord; however, if you were authorized to do the work by the landlord, then you can get a lien on their properties. What other questions did you have for me?

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Customer reply replied 7 months ago
I was authorized to do the work by the tenant who has a NNN lease which gives them the right to modify the property for their needs. As part of tenant improvements this is what I was contractually hired to do.
Customer reply replied 7 months ago
I also have an arbitration clause in my contract
Lawyer: Legal Eagle, Lawyer replied 7 months ago

I see what you mean. If that is the case, then you should be able to get a lien on the property. However, if you have an arbitration clause, depending on what it says, you may have to go through arbitration first before securing any lien. I would verify what that portion of the contract says so you don't have an arbitrator force you to remove the lien and cost you more money.

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Customer reply replied 7 months ago
34;LAGC and Client agree that all claims and disputes arising under or relating to this Agreement are to be settled by binding arbitration in the state of Illinois. The arbitration shall be conducted on a confidential basis pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Any decision or award as a result of any such arbitration proceeding shall be in writing and shall provide an explanation for all conclusions of law and fact and shall include the assessment of costs, expenses, and reasonable attorneys' fees. Any such arbitration shall be conducted by an arbitrator experienced in Construction Law and shall include a written record of the arbitration hearing. The parties reserve the right to object to any individual who shall be employed by or affiliated with a competing organization or entity. An award of arbitration may be confirmed in a court of competent jurisdiction. "
Customer reply replied 7 months ago
That's what it says
Customer reply replied 7 months ago
Additionally I have a termination clause:Termination:• LAGC may terminate this agreement if Client fails to cure any default within 7 days following written notice from LAGC.
• Client may terminate this agreement if LAGC fails cure any default within 7 days following written notice from Client.
• Upon early termination by either party, if there is a balance owed to LAGC, payment in full is required within one business day.
• Unpaid balances owed to LAGC will accrue monthly interest and penalties at the maximum allowed rate under Illinois law.
• Client agrees to reimburse LAGC for any fees incurred from attempts to recover unpaid balances owed to LAGC, including legal fees, postage or collection agencies.
• Early termination of the agreement by either party will retroactively void any applicable guarantees.
Lawyer: Legal Eagle, Lawyer replied 7 months ago

Hi, for some reason, the system opted me out of the question. I'll take a look at what you posted and give you my thoughts.

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Lawyer: Legal Eagle, Lawyer replied 7 months ago

Ok, from what I see, it seems like you have good authority to bring them into arbitration if they don't make good on payment.

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Customer reply replied 7 months ago
Wow, what a waste of $36.
Lawyer: Legal Eagle, Lawyer replied 7 months ago

Hello, I'm sorry to hear that you feel that way. Normally, reviewing the contract provisions is a premium service; however, I offered it free of charge. In addition, you included just the clause, but didn't state specifically whether you had any questions sat all. Was there something that I can do different to help you with this?

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Customer reply replied 7 months ago
You implied the question concerning what my arbitration clause says so I provided you with information. "However, if you have an arbitration clause, depending on what it says, you may have to go through arbitration first before securing any lien. I would verify what that portion of the contract says so you don't have an arbitrator force you to remove the lien and cost you more money." I copy pasted the arbitration clause for you.
Customer reply replied 7 months ago
All you have done is re-state the obvious. And I am $36 poorer with no answers.
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