Mca Loan Contract Breach

Summary

Josh is in default on a Merchant Cash Advance (MCA) loan. He believes the lender breached the contract by approving a second MCA loan despite a no stacking clause. The lender was aware of his existing MCA loan. Josh is considering legal action for breach of contract or offering a settlement. The lender has filed a UCC lien and is threatening arbitration and legal action. The contract was signed on July 9, 2021, and Josh defaulted approximately three months later. The outstanding amount is around $24,000, but Josh is considering a settlement of $2,000.

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i have an mca loan and I am in default. However I believe the lender may have breached the contract since the beginning
What evidence do you have to support your belief that the lender breached the contract?
they have a no stacking clause in the contract, however, they knew I already had an mca loan when they approved me for an mca loan
What state are you in, ****? The laws regarding Merchant Cash Advance (MCA) loans and contract breaches vary by location.
wisconsin. The lender is in Massachusetts
What specific terms in the contract do you believe the lender breached?

In Wisconsin, if a lender breaches a contract, you may have the right to sue for damages.
the no stacking clause, because they knew I already had an mca when they gave me an mca which was my second mca, so I was stacking loans as soon as they gave me an mca since I already had one. I believe this was predatory as well
What is the exact wording of the "no stacking" clause in your contract?
*. Customer’s Representations, Warranties and Covenants. Customer represents, warrants and covenants that as of the Effective Date of, and during the term of, this Agreement: (i) The Future Receipts are freely assignable to Purchaser and are not subject to any claims, charges, liens, restrictions, encumbrances or security interests of any nature whatsoever; (ii) Customer will not sell any Future Receipts to, or obtain a loan secured by any Future Receipts from, any other person or entity (an act commonly referred to as “stacking”) without Purchaser’s prior written consent; (iii) This Agreement does not violate the terms of any other agreement to which Customer or any Principal is subject (including but not limited to any other sale of future receipts agreement, any loan agreement, organizational documents, etc.);
Did the lender give you written consent to take on the second MCA loan?
the lender was the lender that gave me the second mca. They knew I already had one
Did the lender have knowledge of your first MCA loan when they approved the second one?
yes. The first mca was from a different company
Did you inform the second lender about your first MCA loan before they approved your second loan?
yes. They asked me about it and was aware of it
Did the second lender provide any written acknowledgment or consent regarding your existing MCA loan?
no
What actions have you taken since you discovered the potential breach of contract?
nothing
What is the amount of the loan and when did you default on it?
*,* was the loan amount. I owe around *,*
What is the interest rate and the repayment term mentioned in your contract?
there is no interest rate because it is an mca. The payback amount was for a weekly amount, but for some reason they stopped taking payments from me for at least 6 months
What actions did the lender take when they stopped receiving payments from you?
none
What is the name of the court nearest to you in Wisconsin?
i don’t know
The nearest court in Wisconsin could be the Wisconsin Supreme Court. Their contact details are: * E State St, Madison, WI *, USA. Phone: +* *-*-*.
ok
Have you considered seeking legal advice from a lawyer to understand your rights and possible actions in this situation?

General Information:
- In Wisconsin, breach of contract can lead to a lawsuit.
- The nearest court is Wisconsin Supreme Court, * E State St, Madison, WI *, USA. Phone: +* *-*-*.
no, I want to know if the second lender was in breach of contract by giving me the second mca when they knew I had another one already from a different company
Did the second lender explicitly agree to you having another MCA loan when they approved your second loan?
yes
Based on your information, it seems there could be a potential breach of contract. However, it's best to consult with a lawyer for a thorough analysis.
can I sue the second lender?
Yes, you can sue the second lender for breach of contract. However, it's advisable to consult with a lawyer to understand the potential outcomes and risks.
would you say they breached the contract?
Based on the information provided, it appears there may be a breach of contract. However, a legal professional should review the contract and all related documents for a definitive answer.
if they did in fact breach the contract, would that give me grounds to sue them or cancel the agreement entirely?
Yes, if a contract is breached, you generally have the right to sue for damages or potentially cancel the agreement. However, consult with a lawyer for specific advice.
can I show you the entire contract?
Sure, you can share the contract. However, please remember that I can only provide general legal information and not specific legal advice.
Based on what I already told you, what is my percentage that I would win the argument of them breaching the contract?
As a legal information provider, I can't predict the outcome of a potential lawsuit. It's best to consult with a lawyer who can review all the details and provide a more accurate assessment.
im not asking to you. I’m asking based on your current knowledge, what are my chances. I understand this is an estimate and not legal advice
Based on the information provided, it seems you may have a case. However, the outcome depends on various factors including the court's interpretation of the contract.
Write me a letter to send to the second letter offering a settlement or cancellation of the contract due to the previous stated facts
What is the name and address of the second lender?
forward finance is the name. You don’t need the address
What is the amount you are considering for the settlement?
$*
What is the reason behind offering a settlement of $* when the outstanding amount is significantly higher?
because otherwise I will pursue damages and legal remedy for the predatory lending that was done, when they knew I already had an mca, but decided to give me another one. They have the no stacking clause because they no stacking greatly increases the chance of default so they don’t allow it, but allowed me to get their mca anyway
What is the name of the first lender and did they have any communication with the second lender about your first MCA loan?
i don’t think they had any communication. The first lender was fox capital
Did Fox Capital have a similar "no stacking" clause in their contract with you?
yes
What is the exact wording of the "no stacking" clause in the contract with Fox Capital?
Continue
What is the outstanding amount on your first MCA loan with Fox Capital?
it is now paid
but the fact that I had to pay * mca loans made me default on forward finance
What actions has Forward Finance taken since you defaulted on the loan?
filed a ucc lien and now are threatening arbitration and legal action
What is the exact wording of the arbitration clause in your contract with Forward Finance?
i don’t know
It doesn’t matter
What is the reason you believe the arbitration clause doesn't matter in this situation?
because they will do it if I don’t send them a letter
What is the content you want to include in the letter to Forward Finance?
I want them to include how they breached the contract by giving me the second mca while knowing that I already had an active mca, and they have a no stacking clause because they know it increases the chances of default but allowed me to stack by getting an mca with them which caused me financial hardship
What is the exact wording of the "no stacking" clause in your contract with Forward Finance?
i already told you
Can you please provide the date when you signed the contract with Forward Finance?
*
What is the exact date of the contract signing with Forward Finance?
July *,*
What is the exact date you defaulted on your loan with Forward Finance?
i don’t know.
Can you provide an approximate date or month when you stopped making payments to Forward Finance?
maybe 3 months after it was signed
are you going to write the letter?
What is your preferred method of communication with Forward Finance? Email or postal mail?
email
With the letter
now
write the letter
Subject: Request for Settlement or Cancellation of Contract due to Breach

Dear Forward Finance,

I am writing to address an issue concerning our Merchant Cash Advance (MCA) agreement signed on July *, *. I believe there has been a breach of contract on your part, specifically the "no stacking" clause.

I had an active MCA loan when you approved my application for a second MCA loan. You were aware of this existing loan, yet you proceeded to approve my application, effectively allowing me to stack loans. This action, I believe, is a clear violation of the "no stacking" clause in our contract.

This situation has caused me significant financial hardship, leading to my default on the loan. I am now considering legal action for this breach of contract and the resulting damages.

However, I am open to resolving this matter amicably. I propose a settlement of $* to clear the outstanding amount. If this proposal is not acceptable, I am prepared to pursue legal remedies.

I look forward to your prompt response.

Sincerely,
****