I have been contracting with the same company for five years to distribute their publications. In 2006, as we had done in the past, they contracted me and authorized me to hire a sub-contractor to circulate a travel guide. They paid my company (an LLC) in advance for both my contract ($4000) and the sub-contract ($3000). Also in the signed contract was another round of distribution of a brochure to begin 4 months later.
Circulation of the travel guide began. I made the decision to make monthly payments to the sub-contractor which was an option in my contract with them. The contract with them was in the name of the contracting company with my company as the point of contact. I was the signatory on the contract.
When the second part of my contract - distribution of the brochure - was due to begin, the plan had been cancelled and so that portion of my income would not be coming in. I found myself short on cash so I renegotiated my terms with the sub-contractor so I could make smaller payments. I took a regular job and made regular payments until January. At that point a new round of distribution was due to begin. The contracting company had the new travel guide delivered to my warehouse on January 1, I had no reason to believe that our contract would not proceed as it had done in the past so I quit my second job so I could get started with distribution. This year, however, the contracting company decided to re-write the job description of the contractor position. They didn't let me know this until the guides had been delivered to me. It took almost two months to get a contract drawn up and finalized. I missed two payments to the sub-contractor because I had no income. I made a payment in March.
In April, the sub-contractor called the contracting company. Now the contracting company is saying that I commited fraud and that it is a felony since the amount is over $1000.
Since April, the contracting company has withheld all payment to me under the premise that they are going to use it to pay the sub-contractor. I owe the contractor about $1200, I have invoiced the contracting company for over $2000. They have not made a payment to the subcontractor.
I don't feel that I commited fraud. I didn't mislead anybody. There was nothing in either contract that said I would make a lump sum payment to the contractor. What is your opinion?
Circulation of the travel guide began. I made the decision to make monthly payments to the sub-contractor which was an option in my contract with them. The contract with them was in the name of the contracting company with my company as the point of contact. I was the signatory on the contract.
When the second part of my contract - distribution of the brochure - was due to begin, the plan had been cancelled and so that portion of my income would not be coming in. I found myself short on cash so I renegotiated my terms with the sub-contractor so I could make smaller payments. I took a regular job and made regular payments until January. At that point a new round of distribution was due to begin. The contracting company had the new travel guide delivered to my warehouse on January 1, I had no reason to believe that our contract would not proceed as it had done in the past so I quit my second job so I could get started with distribution. This year, however, the contracting company decided to re-write the job description of the contractor position. They didn't let me know this until the guides had been delivered to me. It took almost two months to get a contract drawn up and finalized. I missed two payments to the sub-contractor because I had no income. I made a payment in March.
In April, the sub-contractor called the contracting company. Now the contracting company is saying that I commited fraud and that it is a felony since the amount is over $1000.
Since April, the contracting company has withheld all payment to me under the premise that they are going to use it to pay the sub-contractor. I owe the contractor about $1200, I have invoiced the contracting company for over $2000. They have not made a payment to the subcontractor.
I don't feel that I commited fraud. I didn't mislead anybody. There was nothing in either contract that said I would make a lump sum payment to the contractor. What is your opinion?
