Recently quit independent contractor job, being threatened with legal action.

[geesyaj]

I'm in Colorado, the company in question claims to have locations in Colorado and New York.

I recently quit an independent contracting web development job before starting work on the project, and before requesting a deposit. I had previously completed a separate project for which I have received only the deposit (50%). I quit primarily because payment for the first job had become an issue, and because my day job had picked up a new client that was going to require more time. I only informed the contracting company of the heavier workload, not of issues I had with their payment. My quote on the second project was pretty low, due to previous pressure relating to the first project's quote, and due to my lack of experience quoting this type of project. The president of the company that had contracted me (it's a small digital ad agency that appears to contract all of it's work) has not been able to find quotes anywhere near the quote I provided. He has stated that he cannot go back to the client (same client for both projects, although the projects are on separate web properties) to ask for more money without jeopardizing his future work with the client. He has also stated that he believes the difference between my quote and the new quotes he's taking are my responsibility. When I replied to him that I considered my financial obligations on the project to be fulfilled, and that the responsibility of covering increased costs falls on him, he replied by stating that he will be referencing his legal department on the matter.

I have signed an independent contractor agreement leading up to the first project. The agreement describes all work as project to project and makes no mention of liability for covering costs of replacement of contractor. I can provide the contract, but it will require substantial redactions to protect the identity of all involved.

My questions are:

1. Do I owe him any money to cover the cost of replacement?
2. Can he legally take the difference of the quotes out of the sum he already owes me?
3. Do I need to start preparing for a court case (the amount of all funds in question will not exceed $5,000)?

Thank you in advance for any replies.

 

[jiggy78]

Nobody here is going to read your contract. It sounds like though since you haven't been paid for this second project, and you haven't done any work, then nothing of value has changed hands and there is no contract.

I would tell him to pay you for the first job or you will pursue other collection methods. I also don't know why you would work for him on a second job when you haven't been paid for the first.

 

[justalayman]

did you have a contract to provide a product for some agreed upon price?



If so, unless you can find some reason to invalidate that contract, he has every right to hold you to that contract. As such, he has several options to seek. One being a demand for specific performance. After that, his demand for his increased cost to obtain the work elsewhere would be a reasonable demand.

So, the first thing you need to figure out is; is there a contract

 

[ecmst12]

Answer to your first 2 questions is certainly not. Your 3rd question is hard to predict. It looks to me, though, that you're not going to see the rest of the money you are owed for the work you already did unless you take him to court.

 

[geesyaj]

Why

I also don't know why you would work for him on a second job when you haven't been paid for the first.

The second job was discussed, offered and agreed upon before the first job was completed. But I absolutely agree that I shouldn't work for him on a second job while the payment for the first job is up in the air. The issue wasn't non payment though—we're still not past the net due date for the first job—it was that he came back asking for a substantial discount on the first job.

I appreciate your quick reply, thank you!

 

[geesyaj]

Court

Answer to your first 2 questions is certainly not. Your 3rd question is hard to predict. It looks to me, though, that you're not going to see the rest of the money you are owed for the work you already did unless you take him to court.

I agree, unfortunately. Depending on how this plays out, I am considering taking him to small claims court. I'm not sure it would be worth the effort though. My understanding is that even if the court finds in my favor, he can still not pay.

Thanks for the reply!

 

[geesyaj]

did you have a contract to provide a product for some agreed upon price?

There are email conversations back and forth describing the job and setting a quote price as well as his acceptance of that quote.

If so, unless you can find some reason to invalidate that contract, he has every right to hold you to that contract. As such, he has several options to seek. One being a demand for specific performance. After that, his demand for his increased cost to obtain the work elsewhere would be a reasonable demand.

I am unclear on why your reply seems to contradict the other two opinions here.

Thanks for the reply.

 

[justalayman]

T

I am unclear on why your reply seems to contradict the other two opinions here.

Thanks for the reply.

because where they disagree, they are wrong. As I said, there has to be a determination of whether there is a contract or not. If there is, contrary to what anybody else said opposing this, the other party does have a right to sue for performance or, in lieu of performance, damages, which can be the difference between what you contracted to be paid and what he ends up paying. A court could determine the damages to be something else but the difference in cost to the other party is likely to be accepted as the damages.



let me answer your questions specifically

Do I owe him any money to cover the cost of replacement?

maybe but there are a variety of facts required to determine this. IF there is a contract and you fail to perform as promised, he does have a right to seek damages due to your breach. The damages would be the difference between what you agreed to accept and what he has to pay to have the work done elsewhere. This is simple contract law and as long as he can prove the existence and validity of a contract and the amount of damages, it is likely to be what a court will award him.

Can he legally take the difference of the quotes out of the sum he already owes me?

whether it is legal or not is a question to be determined by a court of law. Of course he can take the action. If you believe it was wrong (illegal) you can sue him. A court will review the case and make a determination. If he countersues and it is ruled you breached the latest contract and he is due damages, an offset is exactly what the court will impose. Again, if there is an enforceable contract and he is due damages is something a court will have to determine, if asked. If he doesn't countersue, the it would be reasonable to expect you are awarded whatever you can prove is owed from the contract you are attempting to have enforced.

Do I need to start preparing for a court case (the amount of all funds in question will not exceed $5,000)?

totally up to you. I don't know the other guy so I can't tell you he will sue you. This is something you would have a better "feel" about than anybody here.


specifically to each other responder:

jiggy is just plain wrong. A contract does not require a transfer of funds to make it an enforceable contract. In its most basic terms, it requires an offer, an acceptance, a mutual agreement of the terms, consideration from each party. Once that is a fact, there is a contract that, barring proof otherwise, is enforceable. The fact he relied on this contract to enter other contracts is why he can seek damages. It's called detrimental reliance.

ecmst12 is wrong because she is failing to accept that the aggrieved party to a contract can sue to seek the enforcement of that contract or damages caused by the breach of that contract. Why she says that I do not know but I suspect it is for the same basic reason as jiggy claimed.

so, basically, what it all comes down to: was there a contract for the second job or not. Then realize that your belief there was not a contract does not prevent the other party from suing if they believe there was a contract and wish to seek performance or damages. If they do sue, you will have to defend with either a claim (and proof) there was no contract or the relief sought is not proper for some reason. The court will decide who is right and who gets what.

 

[geesyaj]

Thank you.

Thank you for your thoughtful response justalayman, I appreciate your input.

 

[ecmst12]

As far as I read, there was a quote for the second job but no agreement, so how could there possibly be a contract? There was only a contract for the FIRST job.

 

[geesyaj]

As far as I read, there was a quote for the second job but no agreement, so how could there possibly be a contract? There was only a contract for the FIRST job.

That was my mistake, there was an agreement through email.

Thanks for getting back to this.

 

[ecmst12]

You'd better have a talk with a local attorney familiar with contract law then, show him all your agreements and see what he thinks about your potential exposure.

 

[geesyaj]

You'd better have a talk with a local attorney familiar with contract law then, show him all your agreements and see what he thinks about your potential exposure.

Thanks for the quick follow up. Any thoughts on what how long I should expect this consultation to take? I'm trying to figure out how much this will cost me.

 

[ecmst12]

I wouldn't think more than an hour at the most. Maybe even 30 minutes.

I DO think you should run the heck away from this guy even if you end up losing a little money over it. You gave him a quote far lower than every other vendor and yet he still tried to demand a further discount after you had a signed agreement in place? Sleazy to the max.

 

[geesyaj]

Sleaze Factor

I wouldn't think more than an hour at the most. Maybe even 30 minutes.

I DO think you should run the heck away from this guy even if you end up losing a little money over it. You gave him a quote far lower than every other vendor and yet he still tried to demand a further discount after you had a signed agreement in place? Sleazy to the max.

Yeah, the sleaze factor has been a problem from the outset, manipulation through insult, threatening tone, demand of discounts, poor communication... I'm definitely learning a hard lesson here.

Thanks for the estimate.