New to this forum, but would appreciate any advice. As an IT/development company, we supplied a leased line to a company (big company, we are a small, family run company). The agreement was for 3 years, at the time it was all going through, the director we were dealing with had gone on maternity and never came back, leading to no written contract ever being signed. (our biggest and most trusting mistake) They pay us, we in turn pay our supplier, most of the amount, only making small profit. They paid the first year, we have invoices stating the details, we have proof of payment. They paid the 2nd year, after a loooooong struggle, which we also have the above proof of, now it's time for the 3rd year payment, they've said they don't want the service any more and are refusing to pay. We have a binding contract with our supplier, so we will have to pay approx £26,000, with nothing from our customer. This could make us go under. Do we have a leg to stand on? We have since learned they have taken another leased line, from another company, who we know have given it to them cheaply as bait to get more business from them, so they are obviously very confident they will never have to pay us. I would appreciate any advice you can gve me. Thanks in advance.
Without a signed contract you will struggle. The minute you mention "we agreed....." then the judge will ask you for proof. Contracts can be verbal, but since the person you made the contract with is not available any more, then you will struggle again. Best to speak to a solicitor who will give you much better advice.
Thank you. We have now found original e mail trail, one asking is this fixed term and our reply, yes it is, 3 year. We also found the purchase order from them, on which we raised the invoice. Does this help us?
i definitely think that you have a case. But have you spoken to your supplier? perhaps there is a way to end the contract with the supplier with a penalty that is smaller then the full payment? Like right now if your going to lose £26,000 if you cannot recover anything from the client then i would speak to the supplier, try to negotiate the amount, its much better then going bankrupt then they get nothing.
I can't speak for your jurisdiction but in the U.S., whether a series of emails and an invoice constitute a contract is a question of fact. Any two judges may look at the same facts and draw a different conclusion. It's a matter of proving that there was offer and acceptance and consideration. It sounds like what you have may be enough to show an enforceable contract. I recommend that you collect everything you have and visit a lawyer who can help you draft a letter with the appropriate terminology that will let the other side know that you are aware of your rights and the applicable legal standards.
Thank you very much for all the replies. I'll go and speak with a solicitor and let you know how it goes
Good luck, mate. IANAL (or solicitor ;-)), but it sounds like you have ingredients of a contract in the email trail: offer, acceptance, agreement on a price and duration. Just because it's via email, doesn't mean it isn't legally binding. Something to consider (and look carefully through all emails from the customer) is: was there any kind of signature-disclaimer included relating to any contract/business negotiations? Whether that would hold water, I don't know, but some companies require their employees to include such disclaimers. A solicitor can give you better advice, of course. Good luck and I hope you can get it settled without going to court!
You should talk with some lawyer and i think he could make this whole thing little bit more clear for you and you could go away without loss.
Break your original contract with your provider. "Frowned upon"? Sure. But people change and renegotiate deals all the time. If your client already has service from another provider, you aren't going to collect (even if you DID have a contract, the best you could do is win a judgment against them and then they still probably won't pay it). So stop wasting your time with them and try to find another client to take over the service while you can. If you can't get that done, explain what happened to the original provider and let them know you won't be needing the service anymore, then stop paying. Contracts are broken all the time and having one doesn't guarantee you get paid anyway. In the future, work out a referral fee with your provider instead of as a reseller - that puts the actual contract between the client and THEM, you just get a commission for the referral.