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We spent 30,000 dollars in contract preparation; can we sue them for that 30K.

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  • We spent 30,000 dollars in contract preparation; can we sue them for that 30K.

    Calif

    My 3 man firm firm got exclusive rights to develop part of a project with a larger company.

    Now they are backing out, the big company that is, because of covid reduced demand.

    We spent about 16,000 dollars in preparation after they told us we were selected; can we sue them for that 16K.
    They happened to tell us they were getting business insurance payments due to covid.

    Our contract with the firm was very short and said nothing about this kind of situation.

  • #2
    Originally posted by Left Tee View Post
    Calif

    My 3 man firm firm got exclusive rights to develop part of a project with a larger company.

    Now they are backing out, the big company that is, because of covid reduced demand.

    We spent about 16,000 dollars in preparation after they told us we were selected; can we sue them for that 16K.
    They happened to tell us they were getting business insurance payments due to covid.

    Our contract with the firm was very short and said nothing about this kind of situation.

    That's really going to depend on how they "told us we were selected".

    Comment


    • #3
      Originally posted by Left Tee View Post

      Our contract with the firm was very short and said nothing about this kind of situation.
      For the amount of money involved you should take that contract to an attorney.

      Comment


      • #4
        If you spent just to get the contract that will be tougher but any funds you spent after, in essence starting to work on and complete your obligations, you likely will have a valid claim. It is certainly worth taking the matter to a few local lawyers (younger ones probably and less expensive) and see what they say.

        Also the other side may still be bound, and have to pay you the FULL amount of the contract.

        You also could sue in small claims court with no lawyer for up to the state max amount which I think is 10,000 and 5000 depending on how you are structured as a business. Corporation etc.

        Comment


        • #5
          How much were you supposed to be paid and when.
          That amount would seem very possibly what you can sue for unless something in the contract allowed them to cancel under certain circumstances, or to pay just for work done or the like; review that short contract carefully and have a lawyer do so as well.

          Comment


          • #6
            We really don't know if there was a contract either verbal or written ever agreed to.

            Comment

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