Contract laws

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Contract laws

I was pressured to sign a contract with a marketing company to represent my online store. I told them at the time of signing it I wasn’t ready to start services but they said to keep them in the loop when I was. The owner of the company has been threatening me ever since that I signed the contract and need to pay for the services even though they’ve never done any business for me. Now he’s saying that he’s going to add a late fee clause in the contract because he’s not being paid. Let me reiterate they have never done any work for me because the first payment was to start services, which I haven’t been ready to do. Can they really take me to small claims over a contract where they’ve never done any work for me? And can they add fees to a contract even though they weren’t included when I signed it?

Asked on November 20, 2017 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If "the first payment was to start services" and you have not made that payment, then you, not they, are in breach of contract: what you describe appears to be that you had an obligation to make an initial payment, *after* which they would provide service. (If this is not the case, please repost your question, clarifying this point.) Therefore, their failure to provide services is at present irrelevant, since they would not have to do so until you paid; and furthermore, if you signed a contract requiring an initial or first payment, you contractually--that is legally--obligated yourself to make that payment. If you fail to make a payment called for a contract when the other side did not first breach or violate its obligations, you are in breach of contract and they can sue you for the money due under the contract, including any late fees or penalties or other amounts the contract says they can get in this case. It doesn't matter if they have not yet started, if you had to pay first.
If you signed a contract, you can't change your mind: you have to honor the contract. And similarly, you can't just say you are not ready.
In the future, even if a salesman pressures you, do NOT sign any contract unless you are in fact willing to go through with it as it is written.


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