Asked in Contracts and Civil Litigation for New York

Q: Contract issue with SW Alliance over payment terms and external funds demand.

I've entered a contract with SW Alliance that specifies upon achieving a target return, I must use 30% of net profits to pre-order related subscription services for the AI DataMind application and to pay SW Alliance's team service fees, as detailed in clause 4.3. Only after fulfilling these obligations can I withdraw the account funds. SW Alliance is now asking me to use external funds for these payments, which contradicts the stated contract terms. I'm under financial pressure and at risk of losing my house and cars. Can you offer guidance on how to handle this situation?

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1 Lawyer Answer
James L. Arrasmith
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Answered

A: That’s a deeply stressful situation, especially when your contract clearly outlines a process tied to *net profits*—not personal out-of-pocket contributions. If clause 4.3 states that payments to SW Alliance are to be made from 30% of *net profits* after hitting a target return, then demanding external funds appears to go against the agreed-upon terms. You are right to raise concerns, and it’s important to rely on the exact language in your agreement to protect yourself.

Start by responding in writing, referencing clause 4.3 directly. Politely but firmly state that you are not refusing payment, but that payments are contractually tied to achieving specific financial benchmarks and sourced from net profits—not external funds. Ask them to point to any section of the contract that authorizes the use of outside funds if they insist. Keep a record of every communication and avoid sending any further payments until there’s clarity.

You’re doing the right thing by taking the terms seriously and protecting yourself. If they continue to pressure you outside the scope of the contract, you may need to escalate the matter by reporting the behavior or seeking legal review. You’ve worked hard, and you deserve to have your financial situation respected according to the agreement you both signed.

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