What to do if I am a business start-up attempting to require my funds from my lenders and have been charged previously undisclosed fees?

I have requested $40,000 and based on the contract that I had signed I was to provide $950 legal fees, a $2,000 collateral insurance and $1,000 fee to the lawyer after the funds were released into my account. What was not stated in the contract was a 5% VAT that I paid $900 and the lender put up $1100 that I would pay back to him after my funds had transferred. Now he is saying that a demurrage fee has accumulated and I should pay the fee of $885. Is this legal? Should I need to pay this?

Asked on October 2, 2014 under Business Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

New Jersey does not have a value added tax, or VAT. There are also no demurrage fees. One of the following is occuring: 1) the lender you are working with is using the incorrect terminology--which is very unlikely; lenders do not get this sort of thing wrong very often, since taxes and fees are their life blood. 2) You are working with an overseas lender, who is charging you fees and passing along taxes from their legal system--which could be legal, depending on the terms of the contract--and you'd need to pose this question to an attorney licensed in that legal system. Or 3) this is some sort of a fraud or scam.

Since you also can't be charged any fees or taxes not stated in the contract--a contract, by its very nature, determines what each party pays and its obligations--it is in addition odd that they are trying to pass along feess "not stated in the contract." Something seems strange here, based on what you write: you should bring the agreement to an attorney to review with you, because this might be, as stated, some sort of fraud.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.