Dispute over a contract between two parties
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Dispute over a contract between two parties
What is the best way to handle this dispute if we cannot come to a resolution?
Hello *****!
My name is Dolan and thank you so much for contacting me!
I just had a few quick questions for you:
Does the other party owe you money or some kind of performance as far as you know?
Yes exactly. I am owed money and I am not sure how to handle it.
I loaned another party $75k and they aren't making me the payments in the agreement we have (it was a standard loan agreement).
Ok got it! Any reasons why they aren't paying up at all?
They haven't given me a solid reason yet. I think they may be having financial difficulties at the moment but they haven't admitted this to me yet. I don't really care since there are clear terms in the loan agreement we put in place and they certainly seem to be breaching that contract by not making payments.
Understood! So you're just wondering what your rights are here, correct?
Yeah my rights but also if I wanted to take the next step and file a civil lawsuit against the other party as well.
Ok! Did you need to tell me anything else? If not, I can start with answering your question.
I'd rather not pay for a lawyer to do that, but it is a lot of money and I need it to be repaid.
Do you need to see the loan agreement to advise me on the potential contract dispute?
Sure thing! You can upload it as well.
OK give me one sec.
[FILE UPLOAD]
Here is the unsigned agreement. There weren't any changes to it, but if you need the signed version, I will need to look in my e-signature tool.
Ok! I just need a little time to draft up a high-quality answer. I'll be with you as soon as possible. It won't be terribly long, ok?
Sounds good.
I'm so sorry about this situation! I want to address your situation with a detailed response, so if you have any questions, don’t hesitate to ask because this law stuff can get complicated. The short answer is you have a breach of contract action. This means that you have a right to sue this person for the money they owe! A breach of contract simply means that one party was obligated to perform and they have either not performed or have said that they will not perform. (Restatement (Second) of Contracts.) This applies regardless of whether the agreement was written or done orally. Typically, the aggrieved party is entitled to be returned to the same position they were in before the breach. You have some options you can explore:
You may want to consider writing a formal demand letter first. We have demand letter templates and you can basically explain to them the date you loaned the money, how much, and what you want them to do (pay you back).
Give them about 14 days to respond and pay up and if they don't, offer them some sort of settlement to avoid court, and if THAT doesn't work, I'd recommend hiring a lawyer and suing given the value of the claim.
OK got it - where are the templates? Are they in this platform somewhere? Or is it your law firm's template? Are the templates specific to contract disputes?
That makes sense though. I haven't sent any type of demand letter. Would I need a lawyer to send it?
Yup, you can use this link - https://www.contractscounsel.com/t/document-form-checkout/119 . This will help save you money on attorney's fees. If you don't get your money after that, then consider hiring an attorney. If you or the borrower is in CA, I can draft a letter on your behalf, but if you end up having to sue, I'll send you information on where to find a local litigator to help!
Got it. I am in CA and so is this other party.
While I have you, if they don't pay after the demand letter is sent, what typically happens?
Sure thing! So if they don't pay, it usually means you need to start thinking about preparing a lawsuit. For you, the one thing you could do is really focus on gathering evidence of the loan. Nearly anything can be used as evidence. This is including, but not limited to, written testimony, oral testimony, text messages, photographs, videos, public records, police reports, medical records, etc. So things like your contract on top of any demand letters can help.
Ok. I have emails and text messages from this party discussing the loan and also discussing the breach of contract for nonpayment. I am assuming I should save these.
How would I go about filing a lawsuit?
Am I right in thinking this is a 'civil lawsuit'?
Would it be done in CA courts or federal?
Yes, it's a civil lawsuit and I'll explain the process:
Filing a lawsuit is relatively simple, but there are some specific steps you must follow. Generally, you will want to begin with drafting up your complaint. Your lawyer would do this for you. Then you need two forms:
Form CM-010 - https://courts.ca.gov/sites/default/files/courts/default/2024-11/cm010.pdf
Form SUM-100 - https://selfhelp.courts.ca.gov/jcc-form/SUM-100
You can see more info here - https://saclaw.org/wp-content/uploads/lrg-filing-a-lawsuit.pdf .
Start with a brief introduction and then a new heading with a new paragraph where you lay out the facts. Once you lay out the facts, create a new heading that provides your legal analysis. For example, you could say that a breach of contract occurs when someone fails to fulfill their obligation in an agreement. It doesn't have to be very long, but something that explains what your legal authority is to bring the case. Afterward, you will want to have your “Prayer for Relief” as a separate heading and then you put in what you want (e.g., amount of money you want). Make three copies of this.
The court may have specific cover sheets and require a filing fee, so check on that as well. When you’re done, file the documents. You need to have a third party send a copy of the filed document to the defendant. Finally, there’s the discovery process where you can ask the other party for documents and even take statements from witnesses (these are called depositions). If you can’t reach agreement, then you go to trial. I know it’s a lot, but does that help make sense of things a bit more? I want to make sure I didn’t leave anything out.
Yes makes sense. Will I need a lawyer to do this or is it something I can do myself? What do you recommend?
I've also heard lawyers take 1/3 of what they recover. Is that true? That seems like a lot here.
That's why I am asking.
Given the amount, I strongly recommend hiring a lawyer and most lawyers do take 33% of what you recover so this can keep your expenses in check!
$25k on $75k seems like a lot to pay though.
I guess I don't know how much it costs otherwise.
Seems like best case scenario is I would recover $50k of the $75k if I sued.
Are there any other lower-cost options to try and resolve this? I need the money repaid but am willing to be patient if there is another route. Before I send the demand letter, just wanted to explore this since I am assuming the demand letter would be threatening a lawsuit.
So the hard part with hiring lawyers is that the money you pay is for peace of mind, to let someone handle the procedures and headaches of negotiation, and to take care of this while you go about your life. Lawyers are expensive, which is why Contracts Counsel started this chat system to help people get answers without paying hefty fees.
Nevertheless, you should look at your contract to see if there are any dispute resolution clauses. We can review it for you for about $*** to see for sure if there are other options in the contract.
Another option is arbitration. Arbitration is a process where people with a disagreement use a neutral third party, called an arbitrator, to settle it instead of going to court. The arbitrator listens to both sides of the argument, and then makes a decision that is binding on both parties. This means that both sides have to agree to abide by the arbitrator's decision. Arbitration is often seen as a faster and less expensive way to resolve disputes than going to court. It can also be more private since arbitration hearings are not typically open to the public. So it's a little cheaper, a little faster, but I still recommend hiring a lawyer for it nevertheless.
Ok got it.
I would be willing to pay $*** for you to review it and give me options.
How can I hire you to do that?
Great! I can set up the job and send you an email. You get a 10% discount as a member as well!
That's great.
Would the job happen through this platform? May be easier that way.
Yup! So you will be able to do everything, including uploading documents, messaging, and billing all through the platform to make it easy! Once you get the email, it'll open up a portal for us and we can chat through there and you still have the option to access this chat as long as you keep your membership.
Did you have any other details you needed addressed or did you have any concerns in general you still needed addressed?
No that sounds good. Thanks for help and look forward to working with you on this.
Will keep an eye out for the email.
Sure!
I hope I’ve provided the information you were seeking. If you need more help, please let me know so l can continue to assist you.
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