Can we be sued?

[spillzdyllz]

What is the name of your state? California

Hi everyone, I'm an employee working for a tech saas company. What we do is sales automation (if you need a hint of what it is this might come in handy). Basically, I have a client who had a change in management and would want to drop us as their vendor. We understood that, however they signed an annual commitment (all are stated there that if they break the contract they will have to pay the remaining months of subscription with us) and they still have about 6 months to pay. They are forcing us to remove the subscription but as per what they signed it is an annual commitment. Will they be able to sue us? And will we be able to counter sue them for breach of contract? (We're just curious)

Hoping to hear from the experts as we don't want to instigate any action immediately.

 

[Zigner]

What is the name of your state? California

Hi everyone, I'm an employee working for a tech saas company. What we do is sales automation (if you need a hint of what it is <removed> might come in handy). Basically, I have a client who had a change in management and would want to drop us as their vendor. We understood that, however they signed an annual commitment (all are stated there that if they break the contract they will have to pay the remaining months of subscription with us) and they still have about 6 months to pay. They are forcing us to remove the subscription but as per what they signed it is an annual commitment. Will they be able to sue us? And will we be able to counter sue them for breach of contract? (We're just curious)

Hoping to hear from the experts as we don't want to instigate any action immediately.

Please remove the link from your post (you can "edit" it and remove it). It violates the TOS for this site. Thank you.

 

[zddoodah]

a tech saas company.

Huh?

Will they be able to sue us?

"They"? Meaning your client? Assuming your client has either (1) the money to hire an attorney or (2) the ability to figure out how to prepare and file a lawsuit, then yes, your client has the ability to sue you. I doubt, however, that's what you intended to ask.

will we be able to counter sue them for breach of contract?

Same answer.

I expect what you really want is an assessment of the merits of a lawsuit that your client might file against your employer and of a countersuit that your employer might file against the client. Rather obviously, assessing the merits of competing claims that arise out of a contractual relationship is impossible to do intelligently without reviewing the contract and knowing all of the relevant facts.

 

[FlyingRon]

SaaS = software as a service. Think about things like Office365 where you don't have Word, etc... installed on your machine, you keep your documents in the cloud and run it through a browser.

The answer is yes they can sue.
You can counter sue.
If they don't sue, you can sue them if they don't pay.

The question is really, who will win. You'll have to run the contracts by a lawyer to get a read on that.

 

[PayrollHRGuy]

WHy would they sue you? If they don't pay you will be the ones having to sue if you want any money.

 

[Taxing Matters]

What is the name of your state? California
They are forcing us to remove the subscription but as per what they signed it is an annual commitment. Will they be able to sue us?

Sue your employer for what? Your company is terminating the subscription, right? So what loss do they have here for which they'd sue?

And will we be able to counter sue them for breach of contract?

If they stop paying your employer then your employer could, of course, file the breach of contract lawsuit. But whether the company will win is another matter. No way to determine that without reading what the contract says exactly, the details of how this service operated, and what losses your company might have (other than some foregone profit).

(We're just curious)

If the owner/president/CEO/managing member (as the case may be) is curious then he/she should consult a California civil litigation attorney who is experienced in breach of contract claims.

 

[quincy]

What is the name of your state? California

Hi everyone, I'm an employee working for a tech saas company. What we do is sales automation [link removed]. Basically, I have a client who had a change in management and would want to drop us as their vendor. We understood that, however they signed an annual commitment (all are stated there that if they break the contract they will have to pay the remaining months of subscription with us) and they still have about 6 months to pay. They are forcing us to remove the subscription but as per what they signed it is an annual commitment. Will they be able to sue us? And will we be able to counter sue them for breach of contract? (We're just curious)

Hoping to hear from the experts as we don't want to instigate any action immediately.

I have quoted your post above with the link removed and reported your original to the moderator for review. Commercial links are prohibited on this forum.

The contract your tech company has with your client would need to be personally reviewed by an attorney in your area to see if the client has the right under the wording of the contract to cancel the contract without penalty.

If your tech company’s contract was drafted sufficiently, the client would be held liable for any payments left in the annual contract should the client terminate the contract early. Your company potentially could sue then for breach of the terms of the contract. If, however, there are flaws in the wording of the contract or in the service provided by your company, it could be possible for the client to terminate the contract early and potentially sue your company.

I recommend your employer have the contract personally reviewed by a California attorney to see where your company stands legally against any challenges by the client.

 

[spillzdyllz]

I have quoted your post above with the link removed and reported your original to the moderator for review. Commercial links are prohibited on this forum.

The contract your tech company has with your client would need to be personally reviewed by an attorney in your area to see if the client has the right under the wording of the contract to cancel the contract without penalty.

If your tech company’s contract was drafted sufficiently, the client would be held liable for any payments left in the annual contract should the client terminate the contract early. Your company potentially could sue then for breach of the terms of the contract. If, however, there are flaws in the wording of the contract or in the service provided by your company, it could be possible for the client to terminate the contract early and potentially sue your company.

I recommend your employer have the contract personally reviewed by a California attorney to see where your company stands legally against any challenges by the client.

Thank you for this @quincy and apologies for the link issue. Won't happen again.

 

[spillzdyllz]

SaaS = software as a service. Think about things like Office365 where you don't have Word, etc... installed on your machine, you keep your documents in the cloud and run it through a browser.

The answer is yes they can sue.
You can counter sue.
If they don't sue, you can sue them if they don't pay.

The question is really, who will win. You'll have to run the contracts by a lawyer to get a read on that.

Thank you for this Flying Ron.

 

[spillzdyllz]

Thank you for the responses, everyone. Apologies if it was confusing. We really just need an idea of what would be our first step. We had the contract reviewed (as you all suggested) and looks like it's going to be a long journey for them. They were dragging our account manager into the ditch.

Thank you thank you

 

[quincy]

Thank you for the responses, everyone. Apologies if it was confusing. We really just need an idea of what would be our first step. We had the contract reviewed (as you all suggested) and looks like it's going to be a long journey for them. They were dragging our account manager into the ditch.

Thank you thank you

I am glad you were able to have the contract reviewed and that it appears your contract is solid.

We all appreciate the thanks, spillzdyllz, so thank you.

Good luck.

 

[zddoodah]

We really just need an idea of what would be our first step.

First step for what?

If the client sues your employer, contact and retain an attorney. If your employer wants to sue the client, contact and retain an attorney.

 

[quincy]

First step for what?

If the client sues your employer, contact and retain an attorney. If your employer wants to sue the client, contact and retain an attorney.

The first step would be to have the contract personally reviewed by an attorney in California, which spillzdyllz said has now been done. And, after the review, it appears the client is on shaky legal ground.