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  1. #1
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    Default How Can I Prove Assignment of a Contract

    My question involves business law in the state of: New York

    I'll try to make this fairly concise and to-the-point. I own a business in NY, and have pay another company to take over some of my clients. They perform the work, and clients are aware that they are a different company than mine. Recently, this second company failed to perform work that was supposed to have been done. The clients are actually satisfied with me, but angry at the other company. I was led to believe that assignment of a contract in New York does not have to be done in writing. Is there a way to prove that by paying the other company and them performing all the work that this was an assignment? And if so, do the customers have an option to sue the other company instead of me?

  2. #2
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    Default Re: How Can I Prove Assignment of a Contract

    explain what you are referring to with the assignment of the contract. Are you subcontracting this other company to do some work but the contract with the customer is still with you?
    What kind of work are we talking about?

  3. #3
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    Default Re: How Can I Prove Assignment of a Contract

    Quote Quoting jk
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    explain what you are referring to with the assignment of the contract. Are you subcontracting this other company to do some work but the contract with the customer is still with you?
    What kind of work are we talking about?
    Yes, i am subcontracting the other company to do some of the work, while the contract is with me. The client in question is aware that the subcontractor was doing work for them. I do debt negotiation work. The other company has negotiators who do some of the work on my behalf.

  4. #4
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    Default Re: How Can I Prove Assignment of a Contract

    If the contract remains with you, you are the contracted party and as such, bear liability. There is no assignment of contract if you are merely subcontracting the work. In a true assignment, you relinquish all rights and duties of the contract. That does not appear to be the situation here.

    You may have an action against your subcontractor for some failure to perform as your contract with them requires but the customers action is against you.

  5. #5
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    Default Re: How Can I Prove Assignment of a Contract

    A quick folow-up question then: my customers are interested in pursuing a lawsuit against my subcontractor for negligence. THey were aware that the subcontractor is a separate entity, and paid them directly at one point. They actually do not wqant to involve me in the dispute if they can avoid it. Would they have a cause of action against my subcontractor directly? I have no indemnification agreement with the subcontractor.

  6. #6
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    Default Re: How Can I Prove Assignment of a Contract

    the problem is: what contract do they have with your subcontractor?

    From what you have stated, they actually do not have a contract with your client. As such, the subs responsibility is to you and their actions are dictated by your contract with them. Your client is to receive whatever services you contracted to provide them. The failure to provide that service is on you.

    The fact they paid the sub directly tends to show there was some contract formed but without knowing all of the facts of the matter, it is impossible to determine if there actually was a contract formed or not.

  7. #7
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    Default Re: How Can I Prove Assignment of a Contract

    So there may be some kind of quasi-contract there, since my subcontractor was paid directly, but it's not certain, basically?

  8. #8
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    Default Re: How Can I Prove Assignment of a Contract

    maybe but the facts of the situation are what will determine that. I can think of several reasons a client might pay a sub directly (most of them not a good reflection on the main contractor though). So, their first action would be to sue you. You would then defend that the activity was not under any contract you had with the client and they contracted independently with the sub (making them a main contractor).

    The subs defense is just as simple: they are not liable to the client because they didn't have a contract with the client. They had a contract with you and as long as that contract was fulfilled, there is no action against them.

    From what you have described, I see no real justification to claim there was a contract formed between the sub and the client. Obviously you have not presented all of the facts of the matter so there may be something that does make a contract. That is something that will have to be reviewed as you progress through this.

  9. #9
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    Default Re: How Can I Prove Assignment of a Contract

    All these messages back and forth on argument of who is responsible, etc., is BLAH BLAH BLAH meaningless nothing. Read this message. This is how the LAW works.

    Obviously you have the contract with the customers. A big question is IF the contract allows you to assign it.
    If not, you will be holding the bag in the end. Let me repeat, if the contract does not specifically allow you to assign it (and probably without written permission of the clients, which would be hard to believe), then it is YOU that is in breach of contract.

    Obviously if the contract was between the subcontractor and the clients, then what the frack are you doing even involved? You want to spin it that way but no judge or jury is going to agree. No attorney will even present such a stupid defense. Hope you made lots of money because you will be spending it all now.

    Even if the clients are not inclined to sue you, they are going to have to. Then you will have to sue the sub-contractor and the clients will be witnesses for you.

    You need to talk to an attorney who will explain the principle of the indispensable party. You are an indispensable party. They HAVE to sue you. If they don't, the sub-contractors will raise this in a motion to dismiss and they will have no choice but to include you. Then you would file a cross-complaint against the sub-contractor. Then get ready for lots of months spent in court while you spend many many thousands of dollars until finally you all come to your senses and settle, or it goes to trial and the jury works it all out for you.

    If the clients sue, YOU will be sued. It will NOT work any other way. You are deluded. See an attorney.

    PS: ANY assignment of a written contract has to be in WRITING. Repeat, a written contract can NOT be assigned verbally. It can not be modified verbally. Do any of you people actually know contract law?

    Secondly, you would need a written contract with the sub-contractor spelling out its duties, etc.
    Without a contract, they are your agents. They might as well be your employees? Get it? You are entirely liable and responsible. YOU are in breach of contract. And once the clients talk to an attorney and find out that you a basicly a sham (I mean, what do they need you for if you aren't doing the work?), and they figure out that third-party debt negotiation is a scam, much less 4th party, they will probably want to sue you too. Again, you are seriously deluded. Oh yea, they probably will all ultimately complain to your state's consumer protection agency and the Attorney General.

  10. #10
    Join Date
    Jul 2007
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    492

    Default Re: How Can I Prove Assignment of a Contract

    Have all options been exhausted with the sub-contractor? What objection does the sub-contractor have to not provide some sort of remedy for this situation; before any litigation occurs?

    Are there any existing provisions in the sub-contract that provide for any failures to perform?

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