Bad parts - can I assign my PO over to the end user?

[TIMMAAYY]

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

I operate as an LLC. Last November I received a PO from MWG for some parts that I had fabricated by OHY.

I picked up the parts and delivered them to MWG.

Two weeks or so later, I was informed that none of the parts worked out, due to several tolerances that were off the mark.

I informed OHY of the problems, and took them a test jig in order to show how the parts oriented together, and why the tolerances were so critical. OHY then tried to rework the parts, which did not work out.

MWG, in desperation mode, sent 15 pieces of raw material to OHY, in an effort to have them make good parts, one last attempt. None of these parts met the required dimensions, either.

Now, 5 months later, MWG is wanting reimbursed for the parts and the raw material.

MWG issued me the original PO, but I did not manufacture anything. I simply turned around and issued a PO to OHY, then invoiced MWG with an added commission for myself.

Can I assign this PO/contract over to MWG so they can collect from OHY directly? I am more than willing to refund my commission, but I can not afford to pay back an additional $3000 that I never earned.

Thanks for any advice and assistance.

 

[Zigner]

Nope - not without your vendor's express permission.

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

I operate as an LLC. Last November I received a PO from MWG for some parts that I had fabricated by OHY.

I picked up the parts and delivered them to MWG.

Two weeks or so later, I was informed that none of the parts worked out, due to several tolerances that were off the mark.

I informed OHY of the problems, and took them a test jig in order to show how the parts oriented together, and why the tolerances were so critical. OHY then tried to rework the parts, which did not work out.

MWG, in desperation mode, sent 15 pieces of raw material to OHY, in an effort to have them make good parts, one last attempt. None of these parts met the required dimensions, either.

Now, 5 months later, MWG is wanting reimbursed for the parts and the raw material.

MWG issued me the original PO, but I did not manufacture anything. I simply turned around and issued a PO to OHY, then invoiced MWG with an added commission for myself.

Can I assign this PO/contract over to MWG so they can collect from OHY directly? I am more than willing to refund my commission, but I can not afford to pay back an additional $3000 that I never earned.

Thanks for any advice and assistance.

 

[TIMMAAYY]

So if OHY would agree to allow me to sign over the PO from MWG, to OHY, that would put me out of the middle in terms of the full amount?

What is the legal term for this? Is there a legal form online somewhere that I can fill out and take with me to a meeting with all parties?

EDIT

Is this "assignment of contract" and I would need consent from OHY to put the burden of collecting against them onto MWG, as it's their money in the end?

 

[justalayman]

regardless of how you want to spin this, MWG bought parts from you and you bought parts from OHY. Those are 2 separate contracts. Typically, MWG would have no action against OHY as they had no contract with OHY.

the only thing that throws the proverbial wrench in the works is your statement of:

MWG, in desperation mode, sent 15 pieces of raw material to OHY, in an effort to have them make good parts, one last attempt. None of these parts met the required dimensions, either.

You do not make it clear if this was under your contract or an independent contract formed between those two parties. For simplicity, I will presume this remained under your contract.

So, MWG has an action against you. You in turn would have an action against OHY. Extricating you from this would require acceptance from OHY to step into your position. I believe OHY would be foolish to do this as they could possibly have a claim against you depending on all of the facts.

There also could be a claim from MWG through you basically against OHY. If there is such a claim possible, for you to get out of the middle, MWG would have to be willing to step into your position as well.

You could actually have much more liability than just your commission.

so, in other words, both of the companies would have to agree to allow you to be removed from the situation.

What is the legal term for this?

attempting to duck out of your liabilities.

 

[TIMMAAYY]

How could OHY have any kind of claim against me? They agreed to make these parts for me, and they made nothing but bad parts.

No need to be nasty with the snide remarks.

 

[justalayman]

=TIMMAAYY;2550984]How could OHY have any kind of claim against me? They agreed to make these parts for me, and they made nothing but bad parts

. as I said, I do not have all of the facts of the situation but here is a simple one:

if OHY made the parts to the specs you gave them, you owe them for the parts they made regardless of whether they worked for MWG or not. They have no responsibility to MWG that the parts fit. Their only responsibility is to produce what you hired them to make.

No need to be nasty with the snide remarks.

what was nasty or snide? I was serious. You may very well have liability to either party here.. As such, your action is effectively an effort to escape possible liability whether that is your intent or not.

 

[Zigner]

How could OHY have any kind of claim against me? They agreed to make these parts for me, and they made nothing but bad parts.

No need to be nasty with the snide remarks.

Yes, both your customer and your vendor would need to agree to the change. I stand corrected on that point.

You have a responsibility to your customer.
Your vendor has a responsibility to you.

They are two separate contracts, as was stated previously...



ETA: If *I* were your customer, there's no way I'd agree to you transferring responsibility to your vendor.

 

[Zigner]

How could OHY have any kind of claim against me?

They may have a claim for non-payment if you haven't paid them yet...

 

[TIMMAAYY]

All parties have been paid.

That's the issue... refunding the money.

The specs are provided on the drawing that was provided to the fabricator, and the parts are obviously not correct. The QC reports show numerous discrepancies from the stated tolerances.

I was just thinking it would be easier for everyone if I refunded my portion to the customer directly, and they work out the rest themselves. Just wastes everyone's time if the end user has to file on me, then I have to turn around and file on the fabricator to pay the end user.

 

[TIMMAAYY]

ETA: If *I* were your customer, there's no way I'd agree to you transferring responsibility to your vendor.

Shouldn't that be the other way around? Shouldn't the vendor ( the one who HAS the money and made the bad parts ) have to agree to transfer of my contract between me and my customer, to themselves and the customer?

 

[justalayman]

All parties have been paid.

That's the issue... refunding the money.

The specs are provided on the drawing that was provided to the fabricator, and the parts are obviously not correct. The QC reports show numerous discrepancies from the stated tolerances.

I was just thinking it would be easier for everyone if I refunded my portion to the customer directly, and they work out the rest themselves. Just wastes everyone's time if the end user has to file on me, then I have to turn around and file on the fabricator to pay the end user.

If it was so easy, OHY would have already refunded the money to WMG and this would be a moot discussion. The fact you are here would imply there is a problem that needs to be worked through and as such, you leaving the party, along with your knowledge of the situation, could be detrimental to to the attempts to resolve this situation.

You played an integral part in this deal and as such, you leaving could remove information critical to one of the party's claims.

 

[TIMMAAYY]

OHY feels ( in my phone conversation with them ) that since the parts "fit" in the test jig, they were correct. Not true, and they know this. They also feel they didn't have a chance to correct the problem. However, two attempts were given beyond the initial problem to correct the problem, and the parts were still bad.

They received the drawing, quoted me a price, and agreed to make them per the drawing, which included the tolerances.

They made bad parts, I/customer paid for them, and they were out of tolerance upon inspection, rendering them useless.