How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Buachaill Your Own Question
Buachaill, Barrister
Category: Law
Satisfied Customers: 10954
Experience:  Barrister 17 years experience
Type Your Law Question Here...
Buachaill is online now

I have a payment dispute with an ex-client. My contract was

This answer was rated:

I have a payment dispute with an ex-client. My contract was with MBC which had two subsidiary companies, Social and Zone. Payment was made to us by the two subsidiary companies, although our work was clearly for the MBC brand (we're a PR company).
MBC put Social into insolvency (Zone is still profitable) and claims that, by virtue of accepting the payment terms, half our contract was novated to Social so MBC (a brand that is still being used) owe us nothing. I'm told that payment arrangements do not affect legal liability. I am representing myself in court - can you tell me the law relating to this so I can quote it?

Hello, my name is***** am a qualified lawyer and it is my pleasure to assist you with your question today.

How long has the payment been in dispute?

Customer: replied 1 year ago.
A year - we're due in court on 15th August
Customer: replied 1 year ago.
Sorry - just under -

OK, thank you for your response. I will review the relevant information and laws and will get back to you in a short while. There is no need to wait here as you will receive an email when I have responded. Also, please do not responded to this message as it will just push your questions to the back of the queue and you may experience unnecessary delays. Thank you.

Customer: replied 1 year ago.
To be clear - I really want to be able to quote the law to them (and I have been told there is a law that makes it very clear that arranging alternative payment arrangements does not affect the legal responsibility for the debt.)

I have looked into your query in more detail but unfortunately it is not something I can assist with. I will therefore ‘opt out’ and a colleague better placed to deal with the nature of your query should hopefully pick this up soon. Please do not reply in the meantime as that will just assign the question back to me and you will experience a delay. Thank you

1. Dear *****e, as your contract was with MBC, the payment obligation which arose as a result of the performance of the contract was with MBC as well. So, in law, MBC, has the obligation to pay you. Not some subsidiary company. The liability of MBC to pay you arises because one party to the contract - MBC - cannot divorce the payment obligation from the performance of the contractual obligations. So here, you should be suing MBC for the payment of the monies owing. The device of putting one of the subsidiary companies into liquidation does not work to put an end to the payment obligation. Every part of the performance of an obligation in a contract gives rise to a corresponding payment obligation. So here, you are simply seeking payment for the performance of the contract.

2. Similarly, the device of novation, does not put an end to the obligation of payment in reciprocation for the performance of the contract. Novation does not put an end to the obligations of a party to a contract. So, this fictitious device of novation does not put an end to MBC's obligation to pay you. This is purely a red herring argument put forward to throw dust in the air and make you believe you should settle for less than full payment.

3. These principles of performance giving rise to a reciprocal obligation of payment are simply first principles of the law of contract. I know of no legal authority which states these principles as they are considered obvious first principles of contract law.

4. Please Rate the answer as unless you Rate the answer your Expert will receive no payment for answering your question.

Buachaill, Barrister
Category: Law
Satisfied Customers: 10954
Experience: Barrister 17 years experience
Buachaill and other Law Specialists are ready to help you