What is the name of your state (only U.S. law)? Potential defendant is in Tennessee, potential plaintiff is in New York
I am a web designer operating a business set up as a sole proprietorship. I undertook a project for someone in NY to develop a complex website. He paid a retainer/initial deposit and signed a contract specifying 3 additional payment milestones for the project.
I delivered about 40-45% of the work (his total payments were about 35% of the contracted price), and, due to some unfortunate circumstances, had to terminate the project.
This was about 6-8 weeks ago.
About a week ago, I got an email from him demanding a refund of the initial deposit/retainer. He did not demand a refund of the second payment milestone. (He did not pay anything beyond the 2nd milestone). His logic was that a "retainer" is fully refundable if a project is not 100% completed. My position is that the retainer assured that I would receive "at least" that much for my work, even if he defaulted on any of the other payment milestones.
I refused to give a refund for the retainer, citing the fact that he had accepted and paid for about 40% of the total work, and had actually paid for less than that.
Now he is threatening to sue me for "lost revenue" of 3 months, which is the figure he has arrived at as how long me having to end the project without completing it has set him back on his timeline.
He stated that he is going to wait until 3 months after the site is operational and making money, then, use that 3 month period as a basis to create a dollar amount of damages for "lost revenue" to seek against me.
I don't believe he can do this, especially since our contract contained no specific project delivery date (though in correspondence, I did project estimated timelines), but I'm trying to determine if there is really substance to his threat.
Also, does becoming an LLC offer me personally any protection, and if so, and I became an LLC only -after- the incident, would it still shield me?
Regarding jurisdiction - the plaintiff is in New York, I am in Tennessee. Yet we never met, and all work product that changed hands was done through email. So who has jurisdiction? TN? NY? Federal only?
Thanks for any input and advice.
Chris
I am a web designer operating a business set up as a sole proprietorship. I undertook a project for someone in NY to develop a complex website. He paid a retainer/initial deposit and signed a contract specifying 3 additional payment milestones for the project.
I delivered about 40-45% of the work (his total payments were about 35% of the contracted price), and, due to some unfortunate circumstances, had to terminate the project.
This was about 6-8 weeks ago.
About a week ago, I got an email from him demanding a refund of the initial deposit/retainer. He did not demand a refund of the second payment milestone. (He did not pay anything beyond the 2nd milestone). His logic was that a "retainer" is fully refundable if a project is not 100% completed. My position is that the retainer assured that I would receive "at least" that much for my work, even if he defaulted on any of the other payment milestones.
I refused to give a refund for the retainer, citing the fact that he had accepted and paid for about 40% of the total work, and had actually paid for less than that.
Now he is threatening to sue me for "lost revenue" of 3 months, which is the figure he has arrived at as how long me having to end the project without completing it has set him back on his timeline.
He stated that he is going to wait until 3 months after the site is operational and making money, then, use that 3 month period as a basis to create a dollar amount of damages for "lost revenue" to seek against me.
I don't believe he can do this, especially since our contract contained no specific project delivery date (though in correspondence, I did project estimated timelines), but I'm trying to determine if there is really substance to his threat.
Also, does becoming an LLC offer me personally any protection, and if so, and I became an LLC only -after- the incident, would it still shield me?
Regarding jurisdiction - the plaintiff is in New York, I am in Tennessee. Yet we never met, and all work product that changed hands was done through email. So who has jurisdiction? TN? NY? Federal only?
Thanks for any input and advice.
Chris