Trouble already - first contract.

[Mr Panda]

At the end of last year I took on my first contract - I was testing the water to see if contracting was 'my thing' so I chose a short three week contract which took me up to Christmas.

In my line of work I require the use of an expensive piece of equipment that is hired. After use of the equipment the kit was in perfectly good working order and to the best of my knowledge undamaged. To contradict this my agent notified me to say the hire company had discovered damage on an instrument in the kit - a very small chip on a £1000 resin prism. No surprise the hire company are requesting a complete replacement unit - the agent is insinuating that I fund it.

I have disputed causing the damage and suggested that either the damage was there prior, occurred on inspection or transit, or the hire company have selected an already damaged unit. To put the damage into perspective the chip is so slight it would be easily missed and could have been a prior flaw that they are charging for, thus I maintain that I am not paying for a replacement.

Where do I stand? Is this a matter to be settled in court? I understand that the liability is with my limited company and I would have no personal liability, nevertheless I do not want my company to be responsible for an arguably third-party caused liability. Does my company have to accept the liability or can it tell the hire company to FO?

To ensure my position is as vulnerable as it can possibly be the contract is now complete but I have not been paid for the work as it took over a month to get my business bank account details (contract stipulates weekly pay). I supplied my details yesterday expecting payment to happen today - to no avail.

Naturally my main aim is to get paid now. Given the agency has received signed time sheets via the client, can the agency legally withhold my fee? And if so for how long? Can the agency take the funds for the replacement unit out of my fee without my consent?

Generally what's my next best course of action please.

[SueEllen]

What are the payment terms in your contract? Did you sign a piece of paper or where given a contract by the hire company saying the equipment was in good working order? What insurance does your company have?

[Mr Panda]

Contract payment terms - weekly.

I don't have a contract for the equipment, it was signed for and off-hired by a third party (not myself).

My company has no insurance.

[SlipTheJab]

Contract payment terms - weekly.

I don't have a contract for the equipment, it was signed for and off-hired by a third party (not myself).

My company has no insurance.

Ouch no PL/PI? Really?

[northernladuk]

I'm sure the hiring company is very well versed in situations like this so I can't believe telling them to FO is even remotely going to work. You are in a really difficult situation. You've no paperwork setting out the terms of the hire or liability etc. God knows how that will pan out.

I don't believe however they can withhold the payment. You've worked it, you are due the money as part of the contract. If there are no clauses about equipment in your contract I'd say you are due your money and the damage is a separate issue. A bit like the situation is we see with people breaching notice and agency withholding payment in lieu of damages for breach. Problem is often the agency win. Possesion is 9/10ths the law and all that.

Really tough one this and you are so far on the backfoot. What kind of fight do you want? A hard one to get your money and then stand firm over the damage or are you probably going fold in a few months when the costs start? I think that's your first decision point. Having a chat with a solicitor wouldn't go amiss either.

[NotAllThere]

1. Bill for you work. If you don't get paid in time, then start the dunning process. For more information, search this site. The question of late/none payment has been covered many times. Treat it entirely separately from any other issue. No - the agency cannot legally hold back the money.

2. Let the agency insinuate. Come back to us when they've stated "you must pay". (It will be up to the third party to prove you damaged it, or at least - if it goes to court - demonstrate "on the balance of probability" that you did it. )

3. Get some Public Liability insurance. It won't help for this case, but will protect you in the future. Some legal insurance might be useful as well.

[Lance]

A hire company would normally expect some wear and tear, and I would doubt that a reputable hire company, with specialist equipment would throw their weight around like this in a business-to-business scenario as they'd lose customers fast.

This sounds quite a lot more like the agency playing you.
Can you talk to the hire company directly and find out what's going on?
What does your contract say about tools and the provision of them?
What does your contract say about accidental damage?

[LondonManc]

A hire company would normally expect some wear and tear, and I would doubt that a reputable hire company, with specialist equipment would throw their weight around like this in a business-to-business scenario as they'd lose customers fast.

This sounds quite a lot more like the agency playing you.
Can you talk to the hire company directly and find out what's going on?
What does your contract say about tools and the provision of them?
What does your contract say about accidental damage?

+1

Also, as NaT says, you being paid for work done is a separate entity entirely and nothing to do with this. If you've got approved timesheets and corresponding invoices then you should expect to be paid promptly.

[SueEllen]

1. Bill for you work. If you don't get paid in time, then start the dunning process. For more information, search this site. The question of late/none payment has been covered many times. Treat it entirely separately from any other issue. No - the agency cannot legally hold back the money.

2. Let the agency insinuate. Come back to us when they've stated "you must pay". (It will be up to the third party to prove you damaged it, or at least - if it goes to court - demonstrate "on the balance of probability" that you did it. )

3. Get some Public Liability insurance. It won't help for this case, but will protect you in the future. Some legal insurance might be useful as well.

No need for legal insurance but professional indemnity insurance is needed as well.

If he had insurance the insurers will either pay up or tell the agency to FO.

[VillageContractor]

Surely the hire company does an inspection when you return it? Or was it handed back to the client?