no solid contract, client was the one who stopped the production, client's filing a complaint against the supplier.

Hi,

It's good to have a free legal advice online. I have a small business and it's my first to be able to have a transaction with this individual. I was able to closed this business deal and I asked for a downpayment which is a big amount, we don't have a contract, but I had signed a letter stating that I had received a certain amount from this individual as downpayment. I followed the correct procedure of giving her an actual sample of the product that we have agreed upon, before I start the mass production of that item. We verbally agreed that I have 15 days of production. After the 8th day she requested to have a partial delivery, so with all of my best effort i delivered 100 pieces.(3,600 pcs was the agreed quantity) After the delivery she just sent me a text message informing me to stop the production and we must talk regarding with the downpayment that she had paid me. Here starts the problem, I informed her that I also shed out a big amount of money just to buy all the materials needed for those products, and I offered her that we divide the materials between us so as to cover the downpayment, she said that me as the supplier should take all the risks and I should give her full downpayment back. I didn't agree with her, and she just sent me a couple of text messages (around 4 mssgs) asking me exactly "so anong plano mo?" I didn't reply to those messages and I think she had asked for legal help because her lawyer sent me a letter informing me to pay the whole amount his client is asking, the letter stated "that their client had referred to them for legal action due to my unpaid account" I'm just wondering why it is stated as an unpaid account wherein the money given to me by their client is actually a partial downpayment? What should I do? From what I've heard they are planning to get my car as payment. I'm really worried. Please, could you please give me some advices that will help me.. Thanks

an oral contract, once proven, is equally binding as a written one. you should focus on gathering your documents to show that there was an order. correlate the dates of the order, payment and purchase of materials.

to cancel a contract, they have to show that you committed a substantial breach which warrants cancellation.

by stating unpaid account, the lawyer is just saying you have a debt.

what went wrong? why did they cancel?

Thanks for replying.. I see, the reason she cancelled was the products that I delivered were rejected by her client (she's a middleman). She said that they are of inferior quality, when in the first place I showed her a sample of the product before it went to mass production. Then later, I've learnt that the item was rejected due to the thickness of the material which she approved of, I already talked with her client (the one she delivered the products to) with all the best intentions to pursue the production. The client told me that he rejected the items due to the thickness and not because of the quality..

Does she have the right to take my car or any property that I have?

Can send her a letter as well? Which would state that I am the who's suppose to file a complaint.

then your defense lies in the fact that your produced items conform to the original samples.

yes, you should write back, and deny liability. in fact, you can indeed initiate your own case or wait for her case and file a counter claim.

just watch out if they try to fashion this out to be estafa or some other crime. this is why you should be prepared with your evidence.

is it not possible to just fix the product to conform to the client's requirements?

I already did offer to manufacture the kind of product that she wants, but the price budget that she gave me only conforms to sample proofing that I had presented to her in the early stage of the transaction, and she in fact stated "hindi ko kaya, masyado mataas" She on the other hand approved the sampled product that is within her price cost for mass production and hence when I delivered 100 pieces of that item, she just instructed me to stop the production.

Attached with her lawyer's mail are the photocopies of the letter that I signed stating that I had received a certain amount as partial downpayment for those items.

All I can show for evidence are the receipts issued to me by the suppliers of the materials that I need for the production and also the materials that are already printed and cut in preparation for production..

Isn't it a bit contradicting that in the letter that I signed states that the amount that I had received was actually a payment rather than what they are accusing me of?

it's not clear what they are accusing you of. but the way it is worded, it should only be a civil case, not a criminal one. good luck.

I see, thanks for the advices...