• Unable to finish a business contract

Dear Respected Sirs, 

Recently I was offered a business proposal by one of the foreign companies regarding designing and completing an electronic circuit project. 

I got enticed by the proposal since it was a major project and promised to offer a long term profitable business to me. 

I had to provide them two documents signed: 

The first document was a confidentiality document in which I promised them that I would hand over all the circuit details to them on finishing the project, and never share anything about the circuit design with anybody. I comfortably signed and submitted this document to the concerned person. 

The second document was the project invoice, in which I gave them the bill of materials and costs required for completing the project. 

I knew that the project was a complex one and therefore in the invoice I clearly mentioned that in a worst comes to worst situation if I failed to complete the project I may not be liable to any form of claims whatsoever, and in such a case I would not refund the material cost, nevertheless I would surely consider refunding them the labor costs involved in such a scenario.

In the invoice I quoted $250 for material cost, and $200 for the labor. Total $450.

I was paid around $350 in advance, and I started designing the circuit, and procured all the required materials from various online stores.

However after completing 70% of the project I realized that it was consuming a lot of time and hard work, and also the parameters involved were hazardous to my home electrical.

I also realized that since I had signed a contract in which I needed to handover all the technical details to the company, that implied I would never get any long term manufacturing orders from them, since on getting the technical details they would be able to manufacture the unit from their end.

Therefore understanding the unfavorable situation, I ultimately contacted the concerned person and expressed my desire to quit the project, and handover the 70% of the details which I had completed.

I provided him all the material cost invoices and requested him to hire another engineer and expressed my willingness to work with the other engineer and help out to finish this project ......completely free of cost.

Since all the money is already spent in purchasing the material, as per my initial condition I cannot refund the material cost, I only have around $50 left with me, and I am ready to refund it to the party.

Hearing this the concerned person has turned hostile, and is forcing me to either finish the job or get ready to face criminal charges against me.

So far I have not earned a penny throughout this technically and physically laborious job, and instead of being thankful to me for providing the 70% job free of cost, the person is blaming me and threatening me of legal consequences.

I would request the expert team here to please help me to sort out this issue.

Thank you,
Sincerely
SM
Asked 3 years ago in Business Law

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15 Answers

First of all there is no criminal liability in case you are not able to complete a agreement or contract and there was not fraud,cheating on your part.

In case of civil liability they can recover the amount as agreed in case if the contract terms are not fulfilled. So as you agreed you can give them termination notice and refund the amount as agreed upon on termination of contract.

For further contesting the case and defences you contract papers need to be persuaded.also don't worry foreign company won't sue for 100$ as the litigation cost will be more than that.

Shubham Jhajharia
Advocate, Ahmedabad
25521 Answers
135 Consultations

5.0 on 5.0

1. Unfinished Business and resultant return of money for the unfinished business would not fall for Criminal Proceedings, since the motive-element of Cheating is absent.

2. HOWEVER, a civil matter can be conducted for failing to comply and causing loss due to committment problems to the opposite party.

Keep Smiling .... Hemant Agarwal

Hemant Agarwal
Advocate, Mumbai
5546 Answers
25 Consultations

5.0 on 5.0

So give them a legal notice stating same for returning the 50$ along with all material precoured for the purpose with invoices

If no terms of termination were set then you are not liable to pay anything you can terminate it with the notice along with the balance amount and material.

Shubham Jhajharia
Advocate, Ahmedabad
25521 Answers
135 Consultations

5.0 on 5.0

1) you must honour the terms of the contract

2) you must refund 200 dollars for the labour cost

3)you are not liable for criminal prosecution as your contract clearly provided that you would only refund the labour cost but not material costs

4) you must hand over the circuit details of work done by you till date

Ajay Sethi
Advocate, Mumbai
82706 Answers
5254 Consultations

5.0 on 5.0

hand over technical details and material bought bu you

Ajay Sethi
Advocate, Mumbai
82706 Answers
5254 Consultations

5.0 on 5.0

This appears simple breach of contract with no compensation involved so you need not worry. However company can press criminal charges, if they have good contacts, you need to hire a good lawyer to be safe.

Amit Pai
Advocate, Mumbai
53 Answers
3 Consultations

4.4 on 5.0

Ask in brief.

Yogendra Singh Rajawat
Advocate, Jaipur
21439 Answers
31 Consultations

4.4 on 5.0

No criminal case is maintainable in the present matter, since the dealing in between you and your client was purely civil in nature.

This being a purely civil case, no FIR/complaint case is maintainable in the instant matter.

You are fully protected by the 2nd agreement you signed with them; neither a case of breach of contract is made out against you.

Vibhanshu Srivastava
Advocate, New Delhi
9300 Answers
193 Consultations

5.0 on 5.0

At any time they take any action against you under law, you will have ample of defence available to you.

Vibhanshu Srivastava
Advocate, New Delhi
9300 Answers
193 Consultations

5.0 on 5.0

There is no intention to decieve

No case of cheating is made out

Ajay Sethi
Advocate, Mumbai
82706 Answers
5254 Consultations

5.0 on 5.0

1. BY refusing /delaying the assigned work, you have caused probable loss to your Client, who may have further committed to his other clients.

2. It is Misrepresentation, Cheating, Failure to honor contract / commitment.

Hemant Agarwal
Advocate, Mumbai
5546 Answers
25 Consultations

5.0 on 5.0

Sir kindly send a notice and refund 50$ by way of bank or other electronic means for record and also submitt the material with them. They won't succeed any legal action against you. As there is no agreement and contract between you and you are bonefide enough to submit material and terminate work on notice so they won't be in any position succeed against you.

There is no cheating and breach on your part it is just they are intermediating you so to get there work done if the guy further repeat same file a police complaint on him for threatening .

Shubham Jhajharia
Advocate, Ahmedabad
25521 Answers
135 Consultations

5.0 on 5.0

Insist with them to close it on your terms only.

At anytime they do not accept your offer, withdraw from this.

Vibhanshu Srivastava
Advocate, New Delhi
9300 Answers
193 Consultations

5.0 on 5.0

Hearing this the concerned person has turned hostile, and is forcing me to either finish the job or get ready to face criminal charges against me.

If they threaten to initiate criminal action against you, you may better initiate legal action from your side even before they are trying to take any action in this regard.

You can demand your dues from the company on the basis of your services to the company so far.

So far I have not earned a penny throughout this technically and physically laborious job, and instead of being thankful to me for providing the 70% job free of cost, the person is blaming me and threatening me of legal consequences.

I would request the expert team here to please help me to sort out this issue.

You can send a legal demand notice for having done their assignment to this extent quoting your oral agreement on the payments

T Kalaiselvan
Advocate, Vellore
72791 Answers
1111 Consultations

5.0 on 5.0

I have $50 left me which I can definitely refund back, and also as per my initial statement I am ready to handover all the materials bought for the project, along with all the technical details absolutely free of cost.

You can mention this in your lgal notice if you have planned to send a legal notice to him giving the details what you have expressed.

Let him give a reply to this irregularity too.

T Kalaiselvan
Advocate, Vellore
72791 Answers
1111 Consultations

5.0 on 5.0

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