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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
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I am preparing legal action for a financial claim against a

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Hello, I am preparing legal action for a financial claim against a start up for which I was a co-founder and had verbal and written contracts breached. I have a number of protocol related questions that arise from pre-action conduct, for which there is quite substantial email correspondence (see below). I suspect it would be easier to arrange a call to discuss the exchanges and the questions:Questions:
1. There was an original claim from 2016 that we attempted to settle through a compromise which involved a contract that I contend they breach (and they contend that I repudiated). How "valid" would it be in the eyes of a court for me reverting to my original claim
2. What is the validity of verbal agreements, which is what underpins my claim
3. How valid would their counterclaim be in court?
4. Are there ramifications/liability if I do not redact without prejudice claims and other sensitive information on tax compliance in a court filing?
5. What rights does the company have to my personal (tax, business) information
6. What additional steps are mandatory to be considered to have met the requirements for pre-action protocolsThe correspondence in question exceeds 5000 words and is about 7 printed pages. Can you advise how I could submit for review?
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Customer: replied 8 months ago.
Hello Nicola, and thanks for the update.I suspect one problem might be the lack of context for the questions. I refer to 7 pages of background correspondence, and I wonder if it would be worthwhile for me to try and update my question with a summary of this background and then arrange a call? Please advise what might facilitate a reply from a contract lawyer?Chris
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Thank you for your patience,

Thank you for your question and welcome. My name is ***** ***** I will assist you. To answer your questions:

1. Was the original claim issued in court - did you sign any settlement agreement?

2. Verbal contract are valid in English law - if you have an exchange of promises of value and an intent to create legal relations, that is a contract regardless of whether it is written. The problem you will have is evidence it, it is your word against theirs;

3. Bringing the claim is their prerogative rightly or wrongly - if the claim is frivolous, without merit or without evidence, you could apply to have it struck out and they could risk being penalised in costs;

4. If you allow an open court to see WP correspondence and do it deliberately the court could penalise you in costs for wasting time - also the evidence would just be inadmissible. I would advise you redact it.

5. None - unless you bring a claim and this is some how relevant to the claim.

6. Can you confirm which protocol you are following? Or do you need advice on this?

I could review the bank ground correspondence, if you can post it to this link, but it may take a day or so.

Kind regards AJ

Customer: replied 8 months ago.
Hello Alex and thank you for the reply. Last week I had committed to provide a formal response to the company in question by COP today. I can produce a bullet point summary of the main points within the hour - what is your availability to review this today and also arrange a phone call by end of play today or (very) first thing tomorrow?Chris

Hi, Thank you. I can review a bullet point summary tonight. I am afraid I am not currently available for a conference call. If you can send me something I will review the summary. Is the deadline a court deadline? Kind regards AJ

Customer: replied 8 months ago.
Alex, it has taken me time to thoroughly review 30 plus pages of correspondence to generate the summary, which I am attaching. In doing so another question arrises, which I think it only fair to treat as separate to the procedural questions you've mostly answered.This question pertains to my right to declare a company in breach of contract for issuing me an ultimatum over changing the terms of delivery to a fixed prices basis (when I declared them in breach they agreed to revert to pro-rated daily billing, and insisted they had remedied the situation and that I was obliged to continue. I maintained that they breached the terms of the contract and they declared that they were terminating the contract because of my refusal to abide by it and deliver services)I'm happy to submit this question separately to you for separate billing, or to agree an enhanced price for this string - especially if we can arrange a one hour call.Kind regards,Chris

Thank you. I have just received this, I will review it tonight. Kind regards AJ

Customer: replied 8 months ago.
Thank you Alex, I look forward to hearing back from you
Customer: replied 8 months ago.
Alex, I was hoping to have heard back from you. I know my question(s) are lengthy, however I am not time pressed to have answers for tomorrow which is a drop-deadline for a formal reply that I must give, into which the legal opinion is a key part.Could you confirm that you can answer the questions by tomorrow, otherwise I will need to go back through the system and resubmit tomorrow morning for urgent attention. My original question was posted Friday, July 14.Thanks in advance,Chris

Thank you. My apologies I had to travel unexpectedly yesterday. I am writing up my response now. Kind regards AJ

Thank you for your patience. The main issue here is whether they could unilaterally change the terms of the contract and thereby force you to accept what amounted to a lower contractual price for the work completed? The answer to this is no - they cannot unilaterally change the terms of the contract, and then claim a breach. If the contract terminated as a result of a break down in relations, clearly not arising from your breach then you can claim all your losses that arises as a naturally occurring consequence of the breach - this would be the contractual price in this instance. If you actually did the work they asked and they are now taking full benefit of the product of that work, then I think they will struggle to claim that there was no verbal contract. Did you have any email correspondence discussing the sweat equity?

Customer: replied 8 months ago.
Thanks Alex. I think I may not have summarised the situation properly, as you seem to have misinterpreted the situation.
-we had a verbal contract, work was performed that they benefited from, but they breached this contract
-This gave rise to my Original Claim, discussed over email and in person, where I claimed the sweat equity an £20k in back pay. No court or 3rd party was involved
-a without-prejudice compromise was negotiated, which (1) provided the pre-agreed sweat equity, (2) agreed to pay £10k for additional past work not covered by the sweat equity, without explicitly referring to it as such by (3) structuring this £10k payment as £5k non refundable retainer and £5k "completion bonus" around a new contract for additional work.
-the £5k was never paid because they tried to alter the terms through ultimatum of this new contract that would have resulted in high risk of lower price to me. I declared they were in breach in doing so, and claimed the £5k as I was entitled to do if the company took action that prevented me from completing the contract
-they withdrew the demand for change of terms, insisting the contract was still valid and then when I refused to accept the validity of this position they declared a repudiatory termination.About this contract position, I wish to know if I was fully entitled to declare a breach and refuse their offer of remediation of terms, and therefore have entitlement to the £5k, or whether the contract rights do in fact favour them?The other question then is, since this without prejudice compromise attempt failed due to their bad faith behaviour, can I revert to my Original Claim?Please indicate if you are able to deal with this by noon BST so that I can make alternative arrangements otherwise?Chris
Customer: replied 7 months ago.
Hello Alex, I hope that you had a good weekend.I must admit a certain inconvenience by the intermittent communication. I will need to wrap up my position against my former company this week. Please let me know if you will be able to deal with my queries, otherwise I will need to refer back to an administrator to re-assign them on an urgent basis.Chris

Thank you. My apologies if I have misunderstood the situation, to put matters simply the purpose of a Without Prejudice offer or negotiation is to make admissions with a view to settlement without prejudicing the claim. As long as you did not discontinue the claim you are entitled to pursue the original matter without this being an abuse of process. You are always entitled to declare if you believe your rights under a contract have been breached - the bot***** *****ne is proving a breach and declaring one are different concepts - once the breach is declared the burden is on you to prove it. What you are actually saying here, is were you obliged to carry on performing the contract once the breach had been alleged? I think your defence here is it became impossible for you to do so? Kind regards AJ

Customer: replied 7 months ago.
Thank you for the clarifications Alex. To answer your last question (and wrap up!) - I was NOT forced to serve out my contract, in fact I refused to continue and they declared a "repudiatory termination" of the contract, insisting they had the rights to do so as I refused to honour the terms. However I hold that they demanded changes to pre-agreed contract terms (first through an ultimatum to change from Time & Material billing to fixed price, to my likely detriment and secondly by changing acceptance criteria for signing off work as complete. I can prove the second point but only have indicative/circumstantial evidence of the first and even though they " offered to rectify this (demand to change terms), without admitting any breach" it was my position that it would be effectively impossible to carry on as any contract depends on good will and they were acting in bad faith by "moving the goal posts" on two key factors.Thanks,Chris

Hi, Thank you. To clarify the first issue - one party cannot unilaterally change pre agreed contract terms especially after the contract has actually commenced and the parties have started performing their obligations. Unilaterally altering the terms would in itself be a breach of contract. Making it impossible for you to actually fulfill your obligations under the contract is acting in bad faith, but you cannot use bad faith as a grounds of a claim or defence under English law. You may potentially have a defence against their claim of promissory estoppel - that is they promised you payment for your work and time and then subsequently changed their position by making it impossible for you to fulfill the contract. Has anyone actually issued a court claim yet?

Customer: replied 7 months ago.
Thank you for the clarification Alex. I have communicated my full claim to them and they have made a couple of underwhelming offers, but proceedings have not yet been issued. From a tactical perspective I am inclined to avoid a full blown court case (with all of the costs & uncertainties) to claim the full £20k, and proceed instead through small claims court, which I believe would involve me capping my claim at £10k. They have insisted that pre-action protocol obliges me/us to consider alternative dispute resolution procedures, and they have requested that we proceed to mediation if I do not accept their recent offer (still significantly less than I recent counter-offer I made).Kind regards,Chris

Hi, Thank you. Have they offered to pay for the cost of the mediator? Kind regards AJ

Customer: replied 7 months ago.
They have not, though they have offered to provide me with a list of those they are willing to work with and have demanded personal records (contracts for my ltd company, as well as tax returns for the company and myself - purportedly to investigate whether I violated the 6 month non-compete clause they claim residual rights to enforce).Chris

Hi, Thank you. I would not disclose that information - it should suffice for you to confirm in writing whether you have or have not breached the non compete clauses. If they choose to bring a claim at that point you can decide whether to disclose that information. Were the non compete provisions in your original agreement?

Customer: replied 7 months ago.
The non-compete provisions were in the original contract/agreement, and I while I did not violate them - I maintain that the company does not have rights of enforcement as they breached said contract.

Thank you. I would agree - there is one thing agreeing to non compete restrictions but if you are not actually paid for the work done in relation to those restrictions then it does make it difficult to enforce them. In terms of next steps what would you like to achieve? Negotiate a settlement without mediation?

Customer: replied 7 months ago.
Thanks Alex. Decision criteria for next steps depend on strength of my case to put in front of either a mediator or small claims court. My claim was for 60 days work, they initially offered settlement equivalent to 27 days, then when I offered to settle for 40 days they countered with new offer that's equivalent to 32 days. Though I would like to settle without further time and cost for mediator/court, their offer isn't close enough - especially if I have a strong enough case to proceed to mediator/court.Chris
Customer: replied 7 months ago.
Alex, yesterday's information was quite helpful. Please let me know if you have any more information/advice on my best way forward (mediation, court, binding arbitration) so that I can progress.Kind regards,Chris

Thank you. Arbitration and Court would be best avoided, they both as expensive as each other. Mediation is definitely a better course of action. Is 40 days the absolute minimum you would accept? How much are those extra 8 days worth to you?

Customer: replied 7 months ago.
My original claim, net of funds paid and not including VAT, is ~£16k, they are offering £6.5k, up from their original £5k. 40 days represents £9.3k. Obviously I would like to target the maximum (full claim) in mediation/arbitration, though I small claims court I'd have to cap the claim at £10k including VAT. Though binding arbitration is more expensive than the mediation which they have proposed, it's binding - and I am thinking to counter-propose binding arbitration as they would want to avoid the uncertainty of having to pay the full claim. Are there any other downsides to arbitration that I should be cognizant of?Chris

Hi Thank you. ***** is binding, but as a contract. Mediation can be binding in the same, you just get the parties to sign a settlement agreement. If the parties renege on the binding Arbitration you would still have to go to court to enforce. Just to consider another point, your relationship with these people has broken down - how much have lost in work as result of having to put time and energy in to this claim? You should consider this as well, as even if you win a court claim or arbitration, you wont get this time back. Kind regards AJ

Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience: Solicitors 2 years plus PQE
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