Articles Posted in Rescission of Contract

In October 2006, Stericycle Inc. entered into a contract with RQA Inc. to buy a segment of its business for $8 million.

Stericycle acquired the unlimited right to use RQA’s software. In addition, the two companies entered into a non-competition agreement. In 2010, the two companies contracted again, this time entering into an asset purchase agreement for $18 million.

One of the assets purchased was RQA’s “Recall and Retrieval Business Services Unit,” which was called the RR assets. The agreement made note that Stericycle would be refunded a portion of the purchase price if Stericycle did not achieve certain pre-set revenues.

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In November 2006, Jose Lopez lent Jesus Quintana $20,570.  The purpose of the loan was for Quintana to purchase a car.  There was no written agreement for the loan, just an oral contract. 

According to Lopez’s lawsuit, Quintana defaulted on the loan by choosing not to make his payments in November 2009.  Lopez filed a lawsuit to collect the balance of the loan.  Quintana responded by moving to dismiss.

Quintana raised the statute of frauds, seeking to bar Lopez’s suit because he wanted enforcement of an oral agreement that would not be completed within a year of the date agreed upon in violation of the statute of frauds.  The statute of frauds is a legal principle that requires certain contracts to be reduced to writing.

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