Breach of Contract on Personal Loan between two Parties (not bank)

[JasonThompson]

What is the name of your state (only U.S. law)? Georgia

I was given a loan by best friends mother in law to help purchase her son's boat from West Palm Beach Florida. Long story short she was moving and the boat was at her house and her son was out of state, if it wasn't sold it was going to be towed away by the mother's landlord after she left.

I paid 2k cash and she loaned me another 1,000 to be paid back at 100 a month over ten months. I signed and agreed to pay on the first of the month with no other contract stipulations.

I made the first two payments in cash to my best friend. After the second payment she had a falling out with my best friend and told me not to pay him anymore to pay her directly. I made the third payment on May 29, 2013 and everything was fine. The next month her daughter and my best friend came down for the 4th of July instead of mailing the payment I was going to send it with her daughter to save postage. She didn't like that so I mailed it July 2, 2013 and she said if I was late she was going to repossess the boat. I never offered the boat as collateral so I know that's not possible. She also threatened late fees.

Now in August I simply forgot and she has told me that she is not going to accept anymore of my payments and instead is going to take me to small claims court for the rest of the money. I tried to apologize and she said she will send all my payments back. I have continued to send the payment while making records of the payments.

Can she consider this a breach of contract and make me liable for her court costs and attorney fees?

I just want to repay the debt but I can not afford to pay it all at one time. What should I do?

Thanks,

Jason

 

[Antigone*]

What is the name of your state (only U.S. law)? Georgia

I was given a loan by best friends mother in law to help purchase her son's boat from West Palm Beach Florida. Long story short she was moving and the boat was at her house and her son was out of state, if it wasn't sold it was going to be towed away by the mother's landlord after she left.

I paid 2k cash and she loaned me another 1,000 to be paid back at 100 a month over ten months. I signed and agreed to pay on the first of the month with no other contract stipulations.

I made the first two payments in cash to my best friend. After the second payment she had a falling out with my best friend and told me not to pay him anymore to pay her directly. I made the third payment on May 29, 2013 and everything was fine. The next month her daughter and my best friend came down for the 4th of July instead of mailing the payment I was going to send it with her daughter to save postage. She didn't like that so I mailed it July 2, 2013 and she said if I was late she was going to repossess the boat. I never offered the boat as collateral so I know that's not possible. She also threatened late fees.

Now in August I simply forgot and she has told me that she is not going to accept anymore of my payments and instead is going to take me to small claims court for the rest of the money. I tried to apologize and she said she will send all my payments back. I have continued to send the payment while making records of the payments.

Can she consider this a breach of contract and make me liable for her court costs and attorney fees?

I just want to repay the debt but I can not afford to pay it all at one time. What should I do?

Thanks,

Jason

She can sue you if she wants, however, if she cashes your checks that reduces the balance you owe her. My suggestion to you is to keep sending the checks (make sure your money is available - even if she does not cash them).

 

[tranquility]

What is the name of your state (only U.S. law)? Georgia

I was given a loan by best friends mother in law to help purchase her son's boat from West Palm Beach Florida. Long story short she was moving and the boat was at her house and her son was out of state, if it wasn't sold it was going to be towed away by the mother's landlord after she left.

I paid 2k cash and she loaned me another 1,000 to be paid back at 100 a month over ten months. I signed and agreed to pay on the first of the month with no other contract stipulations.

I made the first two payments in cash to my best friend. After the second payment she had a falling out with my best friend and told me not to pay him anymore to pay her directly. I made the third payment on May 29, 2013 and everything was fine. The next month her daughter and my best friend came down for the 4th of July instead of mailing the payment I was going to send it with her daughter to save postage. She didn't like that so I mailed it July 2, 2013 and she said if I was late she was going to repossess the boat. I never offered the boat as collateral so I know that's not possible. She also threatened late fees.

Now in August I simply forgot and she has told me that she is not going to accept anymore of my payments and instead is going to take me to small claims court for the rest of the money. I tried to apologize and she said she will send all my payments back. I have continued to send the payment while making records of the payments.

Can she consider this a breach of contract and make me liable for her court costs and attorney fees?

I just want to repay the debt but I can not afford to pay it all at one time. What should I do?

Thanks,

Jason

I'm not all the way sure on your facts, but there is no provision of legal fees in the contract, so it is unlikely the court will award them--we use the U.S. rule in the U.S. The only amounts she can sue on would be the payments already due and missed, there is no acceleration clause in the contract so it does not all become due and payable on a breach. With no method of payment listed, any reasonable method will suffice. Mail would certainly be valid. Since there is no provision on how to count when payment is received in the contract, the time it was deposited in the mail would count as the time it was paid.

Continue to pay as agreed.

 

[OHRoadwarrior]

If she does not cash the checks you send, the money will still be in your account. You can take proof of the moneys existence to court and offer to tender it again in front of the judge. She has no right to accelerate the contract, nor does she have any claim to the boat. By the time this goes to court, she will have received or you will have accumulated almost all the payoff. The judge is going to basically laugh at her.

 

[JasonThompson]

If she does not cash the checks you send, the money will still be in your account. You can take proof of the moneys existence to court and offer to tender it again in front of the judge. She has no right to accelerate the contract, nor does she have any claim to the boat. By the time this goes to court, she will have received or you will have accumulated almost all the payoff. The judge is going to basically laugh at her.

That's what I thought. I was more worried about attorney and court fees. This lady has an axe to grind and I am the recipient of it.

Thanks for all the help guys.

 

[tranquility]

That's what I thought. I was more worried about attorney and court fees. This lady has an axe to grind and I am the recipient of it.

Thanks for all the help guys.

The winner can be awarded court fees. But, without a provision in the contract, legal fees are paid by the party. However, I'm not sure you have breached yet. You might be the winner.

 

[JasonThompson]

The winner can be awarded court fees. But, without a provision in the contract, legal fees are paid by the party. However, I'm not sure you have breached yet. You might be the winner.

Well there was no language in the contract that indicated that any late payments would result in a breach. The contract was just a simple hand written document to appease her. I planned and still plan on repaying all the monies as promised. I hope she will get over it and just let the next five months go by without incident.

 

[Mass_Shyster]

Right now she can sue you for the $100 you were supposed to pay on 8/1. The other payments aren't due yet, so she can't sue for those unless there is an acceleration clause written into the contract.

If you really want to go to an extreme, have someone video you placing the check in an envelope, sealing the envelope, and dropping it into a mailbox. If/when she claims you never sent the checks, you can show the video of the checks being mailed.

 

[JasonThompson]

Right now she can sue you for the $100 you were supposed to pay on 8/1. The other payments aren't due yet, so she can't sue for those unless there is an acceleration clause written into the contract.

If you really want to go to an extreme, have someone video you placing the check in an envelope, sealing the envelope, and dropping it into a mailbox. If/when she claims you never sent the checks, you can show the video of the checks being mailed.

I have taken photos of the checks and then also taken photos of the letter and the receipt I receive from the post office. I kind of want her to file the claim so the judge can make her feel like a fool.

 

[mmmagique]

Well there was no language in the contract that indicated that any late payments would result in a breach. The contract was just a simple hand written document to appease her. I planned and still plan on repaying all the monies as promised. I hope she will get over it and just let the next five months go by without incident.

It's a little late for that since you've breached the contract several times. Keep paying her, but don't feel as if you are "in the right". You didn't pay as promised, so, I don't blame her for being concerned. Why don't you try to get the rest of the payments due to her, to her by the first of every month? I'm sure she'd much rather get the rest of the money rather than paying you back almost $3000. and having to deal with the boat again.

 

[latigo]

What is the name of your state (only U.S. law)? Georgia

I was given a loan by best friends mother in law to help purchase her son's boat from West Palm Beach Florida. Long story short she was moving and the boat was at her house and her son was out of state, if it wasn't sold it was going to be towed away by the mother's landlord after she left.

I paid 2k cash and she loaned me another 1,000 to be paid back at 100 a month over ten months. I signed and agreed to pay on the first of the month with no other contract stipulations.

I made the first two payments in cash to my best friend. After the second payment she had a falling out with my best friend and told me not to pay him anymore to pay her directly. I made the third payment on May 29, 2013 and everything was fine. The next month her daughter and my best friend came down for the 4th of July instead of mailing the payment I was going to send it with her daughter to save postage. She didn't like that so I mailed it July 2, 2013 and she said if I was late she was going to repossess the boat. I never offered the boat as collateral so I know that's not possible. She also threatened late fees.

Now in August I simply forgot and she has told me that she is not going to accept anymore of my payments and instead is going to take me to small claims court for the rest of the money. I tried to apologize and she said she will send all my payments back. I have continued to send the payment while making records of the payments.

Can she consider this a breach of contract and make me liable for her court costs and attorney fees?

I just want to repay the debt but I can not afford to pay it all at one time. What should I do?

Thanks,

Jason

If you fail to make the installments as agreed, of course, it would be a breach of contract.

But the only way the court could tack on her attorney fees to any judgment is if she actuall hires an attorney to represent her in court. (Which is permitted in Georgia small claims court.)

However, by Georgia statute the amount of attorney fees would be limited to 15% of the principal and interest as reflected in such a judgment. See: OCGA 13-1-11(a)(11)

The question of whether she could sue for the entire remaining balance of the loan before it is all due and payable is more complicated.

To answer that question we would need to know the contents of what it is that you signed documenting the loan. If it contains a acceleration clause and she proves that you are in default, then she could declare the entire unpaid balance immediately due and payable and recover judgment accordingly.

If what you signed does not contain an acceleration clause, then it would require researching Georgia law on the issue of anticipatory breach of contract, which doubtfully none of the professionals here would be willing to undertake.

But frankly I don’t think she is going to file suit against you. Especially if you continue to send HER. and not someone else, the monthly payments. Just keep better records than you have in the past and stop worrying about postage costs.

If everyone that threaten to sue did so, there wouldn’t be enough land to build the required courthouses.

 

[JasonThompson]

If you fail to make the installments as agreed, of course, it would be a breach of contract.

But the only way the court could tack on her attorney fees to any judgment is if she actuall hires an attorney to represent her in court. (Which is permitted in Georgia small claims court.)

However, by Georgia statute the amount of attorney fees would be limited to 15% of the principal and interest as reflected in such a judgment. See: OCGA 13-1-11(a)(11)

The question of whether she could sue for the entire remaining balance of the loan before it is all due and payable is more complicated.

To answer that question we would need to know the contents of what it is that you signed documenting the loan. If it contains a acceleration clause and she proves that you are in default, then she could declare the entire unpaid balance immediately due and payable and recover judgment accordingly.

If what you signed does not contain an acceleration clause, then it would require researching Georgia law on the issue of anticipatory breach of contract, which doubtfully none of the professionals here would be willing to undertake.

But frankly I don’t think she is going to file suit against you. Especially if you continue to send HER. and not someone else, the monthly payments. Just keep better records than you have in the past and stop worrying about postage costs.

If everyone that threaten to sue did so, there wouldn’t be enough land to build the required courthouses.

The last three payments have been mailed directly to her. Only the first two were given to her son-in-law, of which she agreed was ok.

There are no acceleration clauses in the loan, just the amount of money owed and the repayment schedule.

I don't deny that I was technically in the wrong for not getting her money there on the first but she was all roses until she had this falling out with her son in law. I wont make another late payment again as I have set it online bill pay for her.

 

[JasonThompson]

It's a little late for that since you've breached the contract several times. Keep paying her, but don't feel as if you are "in the right". You didn't pay as promised, so, I don't blame her for being concerned. Why don't you try to get the rest of the payments due to her, to her by the first of every month? I'm sure she'd much rather get the rest of the money rather than paying you back almost $3000. and having to deal with the boat again.

The contract was only breached twice if you count her getting a payment a day late last month.

Why would she have any claim to the boat if it was not used as collateral and she was never a registered owner?

 

[JasonThompson]

Wouldn't I have to state that I am not going to pay the rest of the loan back for it to be considered an anticipatory breach of contract?

 

[mmmagique]

The contract was only breached twice if you count her getting a payment a day late last month.

Why would she have any claim to the boat if it was not used as collateral and she was never a registered owner?

If she wasn't the owner, why are you buying the boat from her?