Q: What recourse do I have when I signed a contract to complete a project and they paid me less than what I billed for.
I was subcontracted for some IT work. I signed a contract and my billable hrs were below that max amount of billable hrs. I provided a weekly summary of the work I did and hrs worked. Everything went well until payment was due. The first excuse was they didn't approve my proposal which later changed to approval. There was no access to the actual client so the subcontractor who is also based in the US kept coming back with excuses. He paid me 7,500 instead of the $10,000 I billed him which is supported by my timesheets, which he acknowledged. Bear in mind I had to pressure him to provide me with a contract. I got the contract after I started working. What options do I have? I completed this project last yr. The contract says only arbitration is possible. It is unsigned by the contractor even though I asked him several times to sign it. There is an attorney fee clause in the contract.
A: I suggest you review the dispute resolution provisions of your contract. It probably requires you to file a collection suit in Small Claims Court in the County set forth in the contract..
A: Your options are to hire an attorney to send a demand letter, then take legal action if that fails, or just jump right to the legal action. I usually recommend starting with a demand letter. Your inquiry is vague about the contract saying "no court", but I'm guessing you mean the contract has an arbitration clause that says any dispute arising from the contract must be submitted to arbitration rather than to a court. Arbitration is somewhat similar to litigating a claim in court, but with some major differences. A bright side is that it's usually a quicker resolution.
A dispute over $2,500 may or may not be worth hiring an attorney for doing anything BEYOND a demand letter. A factor to decide if it IS worthwhile is whether the contract contains an attorney's fees clause that indicates that prevailing party shall be awarded attorney's fees. If it's not worthwhile to hire an attorney for arbitration, you would represent yourself, but you'd be wise to consult an attorney for advice.
Heather Marie Meglino agrees with this answer
A: The contract will typically control. I am not sure what is meant by "no court" but the contract dictates how you should proceed. Sometimes contracts say that you waive your right to a jury trial but that doesn't mean that you couldn't still sue. Or sometimes the contract requires mediation or arbitration first before proceeding to court.
Also, one other item that attorney's will look for in these contracts is whether it contains a "prevailing attorney's fees" provision. This would allow you to potentially have your attorney's fees paid by the other side, therefore, making it worth it to bring the claim. I do agree that often starting with an aggressive demand letter from an attorney to see if you can work it all out first is usually the most cost-efficient way to proceed before heading to court.
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