Legal Question in Business Law in Illinois

Hypothetical Question on a Company Earning Interest on Someone Else's Money
This is a hypothetical situation the legal issues of which I would be interested in hearing.

Let us say an individual, Joe, has a product for sale. Another individual, Bob, has access to potential purchasers of that product. Joe contracts with Bob to use his (Bob's) services to contact those potential purchasers. In return, Joe agrees to pay Bob a commission on any sales that are made. Bob, as part of his service, also states that he will collect the money from sellers and then disburse it to Joe. However, as part of this service, Bob states that he will delay disbursement of any money to Joe pending confirmation that the sellers do in fact receive Joe's product. This is to protect Bob in the event that Joe is a disreputable type and collects his money while failing to deliver the product, leaving a bunch of angry customers seeking refunds from Bob. While Bob is holding onto Joe's money, Bob places it into an interest-bearing account and collects interest on it for himself.

I would be interested in the status of any interest drawn by Bob on money derived from Joe's sales. Shouldn't Bob be obliged to turn over all or a substantial portion of that interest to Joe, since it is in fact Joe's money?

Thanks.

Asked on 12/23/06, 2:08 pm

Zedrick Braden III Ainsworth & Associates PC

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Re: Hypothetical Question on a Company Earning Interest on Someone Else's Money

Hello. Joe is entitled to the inter-est since the money is in his name.

Bob is obligated to turn over the money to Joe minus his earned commissions. Will be happy to answer any additional questions you may have.

Answered on 12/24/06, 2:53 am

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