What is my responsibility to pay someone who did not follow through with a service that they were supposed to provide?

I am the director of a non-profit organizationI sign a contract with a fundraising person who in lives in another state. I was supposed to pay this person $500 as a retainer fee and the person will receive 20% of all monies he raises for the organization. I paid him $250 and after 2 weeks I was supposed to pay the remaining to $250. After 2weeks from the date that we signed the contract I requested for him to send a report about the fundraising but he did not send the report to me. For that reason I did not send the remaining money to him. I am wondering if I still have to pay? Will he be able to fill a lawsuit against the foundation?

Asked on November 3, 2011 under Business Law, Missouri


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You need to look to the contract you signed with him, as well as any exhibits, addenda, appendices, etc. which are or became part of it. Contracts consist  of mutual obligations; if one party fails in a material (or important) obligation upon it, that failure may excuse the other party from its own performance. If the contract, etc. required a fundraising report and you did not receive one, that may enable you to hold payment until you do, or even to terminate the contract. On the other hand, if the contract, etc. did not require such a report and this individual has done everything required of him, under the contract, so far, then he is in compliance with it and you need to honor your obligations.

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