Agency Wants Money Back

[jmo21]

Who created the documents, you or the agent?

2 different prices, you can't remember which is correct, and an issue with currency conversion, what a nightmare.

[Wanderer]

Essentially, the contract stated that the amounts to be invoiced by my company were (say) £10K, £8K and £8K. However, they have pointed to a Schedule of Arrangements which specifies the amounts should have been (say) £8K, £6K and £6K.

So which one takes precedence? If you ask the contractor he will say the contract does. If you ask the agency then they will say the SOA does. If you ask a lawyer they will start a with the agent then light up a cigar while they write up their bill.

Probably a dumb thing to do but I would do nothing and wait until it comes to court, then take legal advice. Or shut the company and start a new one.

[SueEllen]

Probably a dumb thing to do but I would do nothing and wait until it comes to court, then take legal advice.

A court won't think highly of you if you and the agency don't "attempt" to thrash out what it means.

Get a lawyer to look at the contract and schedule, point out it's their tough luck for not being consistent and to foxtrot oscar.

Or shut the company and start a new one.

Difficult if you have multiple clients.

[GillsMan]

Yeah, closing the company is not an option with multiple clients and a full time permie member of staff on board. If it comes to it, I'll just reimburse them the £5-6K.

However mudskipper made a really good point which prompted me to go back to the contract. Sure enough, Clause 11.5 of the contract states:

"These terms constitute the entire understanding between the parties, and no addition, amendment or modification of these terms shall be effective, unless in writing and signed by each party"

That, I think, makes it slightly more difficult for them to argue that the SoA takes precedence.

The agency haven't yet followed up their initial phone call with something in writing to my email, so until they do there's nothing for me to do. Once I do, I'll get some legal advice. Whether. It works in my favour or I end up having to reimburse part of their money, I'll definitely report back.

[BlasterBates]

Personally in this instance I would accept what was supposed to be paid. In view of the mess up by the agency I would however demand some verification.

I think this isn´t black and white and probably not worth a legal battle since both values were in the contract. Perhaps get some compensation from the agency for making this rather silly mistake.

In the end the client paid some money and the fair value is a that value minus a margin.

[Wanderer]

"These terms constitute the entire understanding between the parties, and no addition, amendment or modification of these terms shall be effective, unless in writing and signed by each party"

That, I think, makes it slightly more difficult for them to argue that the SoA takes precedence.

Really it comes down to deciding if you want to come to a compromise as a gesture of goodwill (ie, will you get more work from this agency?) or if you want to hold them to the contract and potentially force them to argue it out in court.

Before everyone gets on a guilt trip about this, ask yourselves what would happen if the situation was the opposite way around, what would our chances be of getting money out of an agency?

What was your understanding of the amount chargeable for the work? Was it the contract amount or the SoA amount?

[Boo]

...
Essentially, the contract stated that the amounts to be invoiced by my company were (say) £10K, £8K and £8K. However, they have pointed to a Schedule of Arrangements which specifies the amounts should have been (say) £8K, £6K and £6K.

...

So...what would you do?

I'd keep the money. Just say that your invoices are correct according to the contract and you have been paid correctly and there is no further room for discussion. IANAL but I really doubt a court would overturn the status quo so I think you are onto a winner.

Boo2

[d000hg]

Who were you billing? If the company was outside UK then it would be reasonable to assume that the contract amounts should have been in Euro's and therefore the contract was wrong and the schedule was correct

Not really, often the business will be conducted in the currency of the service provider... my euro client is billed in sterling but my US sub-contractor also bills me in sterling.

[LisaContractorUmbrella]

To answer Lisa's question:

I billed the UK-based agency. They billed the European client. My feeling is that the client has been billed based on the lower amount, whereas the agency has paid my LtdCo based on the higher amount. So the agency is out of pocket and, understandably, looking to resolve it.

TheFaQQer's question - and it is a good question - I have many clients on the go at any one time. At the time when I agreed this piece of work, I had six concurrent clients, mostly on a fixed-price basis.

I came to issue my first invoice some three months after beginning the work, as that is when I hit the first milestone. So, to ensure I invoiced the correct amount, I referred back to the contract and billed the amount specified in the contract. This first invoice was paid. Subsequently, the next two invoices were paid as well following my invoices.

Being fair, I think both myself me the agency have cocked up here. The agency cocked up by including a different price in the contract than the SoA. I cocked up by not noticing that discrepancy.

So we then need to ascertain which price was correct. With negotiations being handled over the phone and then formalised in the contract and SoA we are left in a situation where the formal documentation includes two different prices.

I appreciate that it doesn't look good that the amount I billed is the higher of the two specified amounts, but I genuinely would have billed whatever the contract said even if it was the lower amount.

I don't think this is black and white, and I'm certainly not looking for people to tell me what I want to hear (namely, that I was right to bill as per the contract and I can tell the agency to do one) so happy to hear all views, including those that tell me I've cocked up and need to honour the price the agency put in the SoA.

I guess the main question is: which supersedes the other: the contract, or the SoA?

I think your best bet is to negotiate with the agency and come to some sort of compromise - you are both at fault for the reasons you mention here but the mistakes made sound as though they were just simple human error caused by trying to sort things out in a hurry. If either party went down the legal route I would imagine you would be advised to arrange a compromise and that way, although you may both be a little out of pocket, you can walk away with an amicable agreement - you never know when you may need each other

[Untouchable1]

It sounds like a genuine error that neither parties spotted - split the error in 2 and both take a hit.

Untouchable1