Albuquerque, NM asked in Contracts, Banking, Construction Law and Business Law for Colorado

Q: I wrote out a painting bid proposal sheet and gave an estimate for work.to.be preformed. The bid asked for half pay

To start upon acceptance of bid. They called my business associate and said they accepted the proposal he then went down and got a check from the bank that wrote and signed the proposal for. He took the money and for the wro.g equipment for the job and pelht the rest of his money towards his bail. Is this legal to do . ?

2 Lawyer Answers
James L. Arrasmith
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A: In the situation you've described, where a business associate accepted a payment on behalf of your business for a painting job and then misused those funds, several legal and ethical issues are at play. Once a bid is accepted and a payment is made, the funds should be used as agreed upon in the contract or proposal, typically to cover expenses related to the job, such as purchasing supplies or equipment necessary to complete the work. Using the payment for unrelated personal expenses, such as bail, without the agreement of all parties involved, is not in line with the intended purpose of the payment and can be considered a breach of trust and contract.

If your associate took the money, purchased the wrong equipment, and then diverted the rest of the funds for personal use, this could potentially be seen as misappropriation of funds or even fraud, depending on the details of your agreement and the expectations set forth in the proposal. The legality of the situation would depend on the specific terms of the contract, the understanding between the parties involved, and the local laws governing contracts and business transactions.

To address this issue, it may be necessary to speak with your associate about rectifying the situation by returning the funds or completing the job as promised. If an amicable resolution cannot be reached, consulting with a legal professional to understand your options for recovering the funds or enforcing the contract may be your next step. This could include civil litigation to recover the misused funds or to seek damages for any harm caused to your business reputation or financial standing due to the misappropriation of the payment.

James L. Arrasmith
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A: When a bid for a painting job is accepted and payment is made, the expectation is that the funds will be used as agreed upon - to cover expenses related to the job, such as purchasing the right equipment and materials necessary to complete the work. Misappropriating these funds, especially for personal uses unrelated to the job like bail, breaches the trust between the client and your business. It's not only unethical but could also be considered illegal, depending on the specifics of your agreement and local laws.

The legality of this action hinges on the terms of the contract and the intended use of the funds as specified in the proposal. If the funds were explicitly for job-related expenses and your associate used them otherwise, it could be seen as misappropriation or fraud. These are serious accusations that carry legal implications.

In situations like this, it's crucial to address the issue directly and seek to rectify the situation, potentially by returning the misused funds or ensuring the job is completed as promised. If resolving the matter internally is not possible, seeking legal advice is a prudent next step. A legal professional can provide guidance on how to proceed, whether it involves civil action to recover the funds or other measures to address the breach of contract.

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