What to do if I have a small website company and a pub signed a contract but then got a lower offer, so after the contract was signed it refused to pay?

UPDATED: Feb 7, 2015

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What to do if I have a small website company and a pub signed a contract but then got a lower offer, so after the contract was signed it refused to pay?

I’ve sent multiple emails and now some certified letters with “Demand for Monies Owed” notices before I take them to small claims court. The one issue is that at the time I wasn’t a registered LLC but the contract refers to my company as an LLC. I am now a registered LLC so I’m wondering if this would be a huge issue in small claims court?

Asked on February 7, 2015 under Business Law, New Hampshire


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

It may be an issue in small claims court, if you signed the contract as a member or manager of the LLC when the LLC did not exist, for several reasons:

1) If an LLC purportedly entered into a contract but did not then exist, a court would find either that you entered into the contract personally, or alternately, that the contract is void because the entity entering into it did not exist *at that time* (what happened later doesn't really matter).

2) It could be said that you committed a form of fraud, by lying  about the structure of this business at the time, as well as implicitly about its readiness to begin work.

3) There may have been no "meeting of the minds"--necessary for a contract--if they thought they were contracting with an LLC but you knew there was no LLC at the time; there would have been a disconnect in what the two parties believed was going on.

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