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HTC Global Services, Inc. v. Amtex Systems, Inc.

SOM-L-1418-01 (N.J. Super. Law Div. 2002) (Unpublished)

CONTRACTS— A contract that relieves a customer from its payment obligation if that customer’s own customers don’t pay for the related goods or services is binding on the seller even if, in hindsight, it wasn’t a good deal.

An agency that furnished computer processing professionals claimed that one of its customers owed money for those services. The customer argued that the agency violated its agreement by failing to provide semi-monthly invoices and that it was not required to pay because one of its own clients filed for bankruptcy and failed to pay for the services of the consultants provided by the agency. In essence, there were three companies involved in the relevant transaction. The bankrupt company was to pay the agency’s customer for consultants furnished by the agency. A portion of the written agreement between the supplier and its customer stated that the agency agreed that in the event its customer’s own clients did not pay or underpaid “for any time sheets submitted by a Consultant, [the agency] shall not be entitled to compensation from [its customer] with respect to such time sheets and any amount already paid [could] be set off against monies otherwise due and owing by [its customer].” The Court set out to enforce the contractual undertaking and in doing so, sought to discover the intention of the parties “as revealed by the language used by them.” Here, it was satisfied that the provisions of the contract provided the agency’s customer with a meritorious defense of its failure to pay the agency that actually supplied the consultants. “Under the plain language of the agreement, this would be a permissible reason to withhold payment.” Whether the agency could have entered into a better agreement was immaterial. The Court decided to interpret and enforce the contract as it was written.

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