Q: Provided call center services for 24+ months; client now refuses to pay invoices. Can we take legal action to recover $?

A: First, seeing a contract alone does not necessarily mean that the other party agreed to its terms. If I receive and read your contract, I will be aware of its terms, but that does not mean that I agreed to them. The lack of a signature indicating assent to the terms is going to be a problem. It would be helpful if you have an email or other writing by the other party indicating in some manner that they agree to the terms of your contract.

Second, a $200 weekly late fee seems unreasonable and excessive. In most instances, legally recoverable damages are compensatory, not punitive. Unless expressly authorized by statute, late fees are considered interest because it is compensation for the detention of money. In the absence of an agreement signed by the obligor, the law allows a creditor to charge interest of 6% per annum. By written agreement, the parties can generally agree to interest as high as 18% per annum. Exceeding this rate constitutes usury. There are certain types of transactions where federal law preempts Texas usury law.

Third, it may be difficult to enforce the three-month cancellation notice provision in the absence of some affirmative indication from the other party that they specifically agreed to such a provision.

Fourth, severance pay for employees you had to terminate may be incidental and consequential damages. You likely will have to show that it was foreseeable to the debtor that such damages would arise from a premature cancellation of the service. For example, you might need to produce some sort of communication showing that you told the other party that you were hiring additional employees specifically to staff their call center, that you were legally obligated to pay those employees severance, and that you would not have been legally obligated to pay those employees severance if you received the three-month advance notice.

You should contact an attorney who practice is the area of law called commercial litigation in or near the county where the service was provided to thoroughly analyze your contract and all relevant communications between you and the other party to chart a course forward. Ideally, this attorney should also be familiar with usury laws. You may want to rethink your damage model and theories of recovery. You may have a fraud claim premises upon a false promise of payment which the other party never intended to honor as evidenced by their failure to sign your contract. You may encounter a waiver argument in that you provided services and continued to provide services knowing full well that the other party had not signed your proposed agreement.

As an experienced attorney who is familiar with usury and practices in the area of commercial litigation and who is board-certified in civil trial law, I would handle this type of case on an hourly fee basis with an initial retainer of $25,000. There is a risk, however, that your recovery will be limited to $19,181.83 plus lawful interest at the rate of 6% per annum from the date those invoices were due until paid. While you can generally recover attorney fees in a suit for a debt arising from services performed, a demand of $239,291.66 risks being found to be excessive which is a defense to the recovery of attorney fees.