Change to contract payment terms

**Sockpuppet** · 3 November 2006, 10:08

Originally posted by teejaydee

I am halfway through a contract. I have just received a notification from the agency, seeking to impose a change to one of the contract terms, namely the one regarding payment of invoices. They say that due to a change imposed on them by the client, they will no longer pay any invoice received more than fourteen days after the month-end.

Although in most cases it should be easily possible to submit an invoice within the fourteen days, there are situations (holidays, sickness, etc.) where this may not be possible. I believe the agency's right to refuse to pay invoices unless received within this limit is unfair.

I wonder if the agency can insist on a mid-contract change such as this? What could happen if I refuse to agree to this change? Is it lawful for a party to refuse to pay an invoice because it is received after a particular date?

It will be set out in the contract. If not make sure your invoce nicludes words to the effect of "payment due within x days in accordance with our T&Cs" if you are your own Ltd company.

**BoredBloke** · 3 November 2006, 12:05

Tell them where to go. They can't impose a change on you unless you agree bto it. On that basis they could simply turn round and say that they now want to pay you £10 per day - you wouldn't be obliged to take that either.

**tim123** · 3 November 2006, 13:09

Even if it was possible for the agency to change a contract mid term, I doubt that this change would be allowed.

There is a six year statutory limit on the collection of a debt. Whilst it is reasonable for a company to place some restrictions on stale invoices I can't see a judge accepting 14 days as reasonable, even in a B2B contract.

Which means, of course, that the change the client have imposed upon the agency is equally invalid. Any reasonable sized corporate would know this so I do wonder what type of numpty you have for an end client (unless the agency have made up the reason).

tim

**XperTest** · 3 November 2006, 13:23

Originally posted by tim123

Even if it was possible for the agency to change a contract mid term, I doubt that this change would be allowed.

There is a six year statutory limit on the collection of a debt. Whilst it is reasonable for a company to place some restrictions on stale invoices I can't see a judge accepting 14 days as reasonable, even in a B2B contract.

Which means, of course, that the change the client have imposed upon the agency is equally invalid. Any reasonable sized corporate would know this so I do wonder what type of numpty you have for an end client (unless the agency have made up the reason).

tim

I would have thought it is the agent (unsurprisingly) being the numpty if they have agreed to these newly imposed payment terms and now trying to impose them on their contractors to waive the risk that they have taken.. It seems to me the client can only win here, and whoever is silly enough to agree with these terms may lose out.

**tim123** · 3 November 2006, 13:49

Originally posted by XperTest

I would have thought it is the agent (unsurprisingly) being the numpty if they have agreed to these newly imposed payment terms and now trying to impose them on their contractors to waive the risk that they have taken.. It seems to me the client can only win here, and whoever is silly enough to agree with these terms may lose out.

I agree that the agent is being a numpty by accepting these terms.

But I still think that the client is a numpty for asking. Even if the agent says yes, he will still have the right to go to court to get the clause voided. IMHO he will win and the client should realise this. Asking for a contract change that can ultimately be enforced is a waste of everybody's time.

tim

**Mordac** · 3 November 2006, 14:02

It'd be interesting to see whether the client tries to delay signing timesheets (manager on holiday etc). The agency cannot change any clauses without your agreement, and certainly can't refuse to pay an invoice submitted more than 14 days after the period in question. I think you need to reply politely saying "The Directors of xxx Ltd have considered your request to change the payment terms of the contract dated xxxxx, however on this occasion we have decided this would not be in the commercial interests of xxx Ltd to agree to such changes. We therefore consider the original contract of xxxxx to remain in force for the duration."

And see what they do about that.

**BoredBloke** · 3 November 2006, 14:33

At the end of the day your contract is with the agency. Who cares how long it takes for them to collect their money. Just because the payment terms on their contract has changed, why should you accept a change in yours. Also given the short timescale (14 days) you could lead yourself open to the agent pretending that they have not recieved your invoice and witholding payment.

As i said earlier, tell them where to go - Unless they are prepared to make it worth your while!!

**teejaydee** · 3 November 2006, 14:56

Thank you all for the useful advice. I think the problem stems from the fact that the agency wishes to remain on the client's approved supplier list. In order to do this they were apparently told by the client they would have to submit their invoice within fourteen days, or else the client would not pay it. They are now seeking to pass this time limit on to all the contractors on site (it's not just me!).

Obviously this suits the agency - they just invoice the client based on the invoices received from contractors on or before the cut-off date. They are trying to remove the risk of having to pay late-received invoices from contractors without being able to invoice the client for these, by changing the contract wording.

**Mordac** · 3 November 2006, 15:08

Name & shame (client and agency). You might even be able to threaten them with the DTI.

Change to contract payment terms