QUESTION

"Prototype" in contract, threatening no pay unless "Final Product"

Asked on Dec 20th, 2016 on Contracts - Ohio
More details to this question:
Contract calls for a protoype electronic device to be created. It's been 3 years and I've created several electronic prototypes of increasing complexity, but this isn't enough. Now they want a finished, production-ready device before I get paid. I started working on this but I'm going broke, so ceased. They are threatening to not pay anything and incur legal costs in contract dispute. Do I have a leg to stand on here?
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1 ANSWER

Appellate Practice Attorney serving New York, NY
From what you've written, the other side has breached the contract, and you can sue for the money due you.  The problems, however, are twofold.  First, even though you say that the conrtact required the other side to pay you upon delivery of a prototype, you have apparently gone beyond that despite not being paid, without asserting a claim for breach of contract  This will give credence to the other side's arguments that (a) the contract required you to produce more than just a prototype; or (b) that the original contract requiring only a prototype was modified (also, depending on how long it has been since the initial breach, i.e. the failure to pay you for your first prototype, you may have a statute of limitations problem).  The second issue is more practical; from what you've written, it appears that the other side has more resources and is willing to spend money fighting you in court.  Unfortunately, the party with the deeper pockets usually has an advantage in a lawsuit.  I don't know how to solve this, other than to try to get an Ohio attorney (I am located in NY) who will handle the matter on a contingency (which may be difficult) or to handle the matter yourself.
Answered on Dec 21st, 2016 at 8:15 AM

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