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Is There a Contract or Isn't There a Contract?

Recently we represented a client who was suing a former customer for payment. The customer wanted the services of the client. The customer was sent a contract which outlined the services and the price, however, he never signed it and sent it back. However, he made the down payment.

The client then worked with the customer over a period of time. The customer made partial payments, but refused to pay the remainder once the project was completed. The client delivered and the customer refused to pay. Customer then said there was no contract, because he never signed it.

Client hired us to sue the customer. We sued for breach of contract. They argued to the judge that there was no contract. We argued that there indeed was because the client sent the contract with the terms, and the client ratified it by making the down payment, making additional payments and accepting the work. The judge found in our client's favor. He found that the client could not hide behind the argument that the contract was not in writing. It didn't matter. He accepted the work and made partial payments, proving that the work was not done for free. It was done with the expectations of being paid.

The takeaway. You have a contract even if its not in writing if the party you contract with fails to sign it. However, its always better to have a contract in writing.

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