The Fine Print – Client Didn’t Pay…Upholding Contracts

“Dear Attorney,

I sell personalized organic pet food meal plans and the ingredients to make them.  I have a contract clients sign stating what I do and how much my services cost.  Recently, a client refused to pay his bill of $5000.00 because he claims I took too long and that because he never signed the contract, he’s not responsible for paying me.  I did not take too long, and he agreed to the terms of the agreement in an email even though he never signed the actual contract.  Can he really not pay me or is he just being stingy?”

Pet food or shower curtain rings, a written contract helps the parties understand their rights and obligations to one another as well as determine what to do if one party to the contract fails to do his part.  In North Carolina certain types of contracts must be in writing and signed by the person / company against whom enforcement is sought.  A contract for the sale of items, such as a car or refrigerator, must be in writing if the sales price is $500 or more.  Similarly, a contract for the sale of land must be in writing as is the case for residential lease.  The requirement for a written contract, however, is substantially more complicated than just saying “in writing”.  What qualifies as a “writing,” and how is the requirement for a “signature” satisfied in today’s world?  Finally, what are the rules if people who signed it disagree about how the contract was to be performed?

First, you have a contract with your client.  The writing and signature requirements are satisfied if you sent him the terms of the agreement and he sent an email to you agreeing to those terms.  The more complicated issue is how do you interpret the contract if the two of you do not agree on when and how it was to be performed.  You do not mention what the contract said regarding the time frame to perform, but if the contract is silent about the time to perform, this is essentially a question of reasonableness and each side’s interpretation of that.

Could you have been late in performing? If so, does this affect what your client owes you? It may not, if your client received the full benefit of what was promised to him and was not damaged by the delay then he should be responsible for the full amount.  In short, it’s a complicated question which will potentially require looking outside what is known as the “four corners” of the contract to see what you and your client intended the time to perform to be or thought the time to perform was.  This can be found in communications between you and your client as well as written correspondence such as emails.

My recommendation is to look at your contract, does it say when you had to deliver the meals? If not, did you and your client discuss the time period for you to do your work?  Be honest with yourself- were you slow to perform?  If so, was the client harmed from this delay? Is your client being unreasonable in his expectations or just stingy, not wanting to pay?  Honesty in the self-analysis by both parties may help the two of you reach an agreement to resolve the contract dispute.  If you cannot reach an agreement, consulting an attorney to assess your claim would be worth it so you can determine if it is worth pursuing in Court.

Laura H. Budd, Esq. is a managing partner experienced in contracts, corporate law and litigation at Weaver | Budd, Attorneys at Law.  To schedule a consultation with her, please call (704) 841-0760. To schedule a consultation with her, please call (704) 841-0760. The information contained in this article is general in nature and not to be taken as legal advice, nor to establish an attorney-client relationship between the reader and Laura H. Budd or Weaver | Budd, Attorneys at Law.

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