Electronic Signature Statute Helps Debt Settlement

A lumber company supplies building materials to a sub-contractor at a general contractor’s request. Somewhere north of $200,000.00, the sub-contractor becomes a deadbeat. The lumber company emails the general contractor about the debt.  Eventually, the general contractor sends an email stating that it would pay the debt and then fails to pay.  Refusing to take a large hit without a fight, the lumber company called us.

When reviewing the lumber company’s documents, we took note of the general contractor’s email. This email will make the difference between getting paid and getting stiffed.

The Statute of Frauds requires that a contract to pay another person’s debt be in writing and signed by the party responsible for paying.  Chapter 110G, Section 7 (d), Massachusetts Uniform Electronic Transactions provides that “If a law requires a signature, an electronic signature satisfies the law.” The customer’s email constituted an enforceable guaranty!!

We immediately draft the complaint, affidavit and ex parte motions and file them with the court. Based on our pleadings, the court allows our ex parte bank attachment motion.  Eureka!! As a result of the electronic guaranty, we freeze over $250,000.00 in the general contractor’s bank account.

Within a few days the lumber company had an agreement to receive $200,000.00 from the general contractor. It released the balance caught by the bank attachment based on business considerations pursuant to a favorable settlement agreement that we negotiated.  Without our immediate action, the lumber company would not have recovered $200,000.00 within three months and kept the general contractor as its customer.

If you want a hard working experienced Massachusetts bad debt collection attorney to be on your side, call Alan M. Cohen at 508 620-6900 or email alanmcohen@collections-law.com for further information about how we can help you collect your money.