Drawing up contract with client

[northernrampage]

Hello,

I've probably got a contract directly with a client, not through an agent (just waiting for final confirmation details).It's likely to only be 2 months... but if I do okay/work around it will get extended.

I've been out of work for 18mths, last year I contracted (for the first time) but was only for 6 weeks. Again, this was directly with client. I had my pay go through an umbrella company, was on a week by week basis. I was pretty slow getting my timesheets in, and when I chased money afterwards it took a while after the contract to get it. I didn't need the money straight away, and I was late then so wasn't a big deal.

What I wanted to know... will a client pay you late anyway? Looking at the offer letter the umbrella company sent the client it has seven days payment terms, but it was up to me to chase the client the last time.

Should I draw up a separate contract with payment terms? They won't default (well, pretty sure as a big company) but am I being naive to think I'll get money weekly if I'm not going through an agent?

I'm guessing if on a 2mth contract I can only specify weekly notice on each side as well..any advice good.. or if someone could point me in the right direction would be grateful. I've been out of work for so long I do need the money now.

[MPwannadecentincome]

Hello,

I've probably got a contract directly with a client, not through an agent (just waiting for final confirmation details).It's likely to only be 2 months... but if I do okay/work around it will get extended.

I've been out of work for 18mths, last year I contracted (for the first time) but was only for 6 weeks. Again, this was directly with client. I had my pay go through an umbrella company, was on a week by week basis. I was pretty slow getting my timesheets in, and when I chased money afterwards it took a while after the contract to get it. I didn't need the money straight away, and I was late then so wasn't a big deal.

What I wanted to know... will a client pay you late anyway? Looking at the offer letter the umbrella company sent the client it has seven days payment terms, but it was up to me to chase the client the last time.

Should I draw up a separate contract with payment terms? They won't default (well, pretty sure as a big company) but am I being naive to think I'll get money weekly if I'm not going through an agent?

I'm guessing if on a 2mth contract I can only specify weekly notice on each side as well..any advice good.. or if someone could point me in the right direction would be grateful. I've been out of work for so long I do need the money now.

You mention the offer letter the umbrella co has sent the client - if that has 7 days payment terms that is good, I have direct contracts and I only managed to get away with 30 days so far.

My contracts have a clause stating "Any invoice not paid by the due date shall be subject to the provisions of the Late Payment of Commercial Debts (Interest) Act 1998 as amended and supplemented to incorporate the features of the European Directive 2000/32/EC. The Consultant shall be entitled to claim reasonable debt recovery costs as well as Statutory Interest. " where "Statutory Interest" is defined within the contract to relate to a margin above a reference interest rate that would be charged on late payments.

I've never had to use it, so not sure how effective it is.

HTH

[chapeau]

That law would apply even if it wasn't mentioned in the contract, no harm in putting it in, no harm in leaving it out.

Should I draw up a separate contract with payment terms?

Should go in an Appendix together with how much/when/what for. 30 days is 'standard' commercial terms, though large companies are notorious for not paying small companies on time. It's not like wages.

[northernladuk]

Is it just me or do I worry for you in this situation? New to contracting is daunting, new to contracts directly with the customer doubly so, especially judging by the basic level of question about notice period and payment methods/timescales.

You are entering in to a contractual B2B arrangement with you being a director of a company. This is a very different mind set to you signing a piece of paper and you starting and seein yourself as employed.

You will see many posts on here with people talking about wage, holidays, empoyment rights from client etc... in most cases this is showing a wrong mindset. In some cases its ok to think this I guess but you need to be very aware of the situation between you and expectations.

Are you writing your own contract or getting legal people to draft you one or something?

Someone mentioned best they can do is 30 days which I have also found. I had 60 days imposed on me once. Even at this I had to push constantly for them to even come close to these days.

My contracts have a clause stating "Any invoice not paid by the due date shall be subject to the provisions of the Late Payment of Commercial Debts (Interest) Act 1998 as amended and supplemented to incorporate the features of the European Directive 2000/32/EC. The Consultant shall be entitled to claim reasonable debt recovery costs as well as Statutory Interest. " where "Statutory Interest" is defined within the contract to relate to a margin above a reference interest rate that would be charged on late payments.

The wording in this is good but I would have thought it is only as good as the lawyer you have to employee to enforce it if it all goes Pete Tong and how often does that really happen!

[TheFaQQer]

<BrowneIssueMode>

I've probably got a contract directly with a client, not through an agent (just waiting for final confirmation details).

Congratulations, but don't believe it until you actually start work.

I was pretty slow getting my timesheets in

You'll not make that mistake again, at least.

What I wanted to know... will a client pay you late anyway?

Probably - there is a worrying trend of big businesses using smaller companies as their 0% interest overdraft facility.

Should I draw up a separate contract with payment terms?

No - include it with the contract that you have with the client, if you are going direct. Just another clause in the contract will do it.

They won't default (well, pretty sure as a big company)

So was Enron, WorldCom etc. But positive thinking goes a long way....

am I being naive to think I'll get money weekly if I'm not going through an agent?

Yes - the will probably be on 30 days terms from invoice at the very least. And it depends on what the invoicing frequency is, as well. Many big companies would expect an invoice at the end of the month and then 30 day terms (which they then pay late on) - negotiate and put it in the contract. Then make sure they stick to it.

I'm guessing if on a 2mth contract I can only specify weekly notice on each side as well..any advice good..

There are a number of threads about notice period, and whether it is a good thing or a bad thing. Also, since you only get paid for the days that you work, then a notice period is going to make no difference one way or the other. UNLESS you word the contract cleverly, so that there is an "early termination" fee rather than a notice period....

</BrowneIssueMode>

[northernladuk]

Nice post TheFaQQer

[northernrampage]

Is it just me or do I worry for you in this situation? New to contracting is daunting, new to contracts directly with the customer doubly so, especially judging by the basic level of question about notice period and payment methods/timescales.

Yes, I think you could be correct in the worry. I have had a long-time off for personal reasons and the thought of having to go back into a dire permanent job makes me want to stick pins in my eyes after the year I've had. Hence, going for a contract so I can leave/see if we like each other. And obviously, it's better money.

But I think I need to do a lot more reading on here before doing that. This is an ideal contract for me, going in at the beginning of rehauling processes, lost of difficult relationship/stakeholder mgt (which I'm very good at). And the type of PM work I would be doing is very similar to what I've done before. Because it's something I know I could do and would enjoy (within reason) I think I'm ignoring some red flags (e.g I have no idea what freelancing involves and the big company doesn't seem organised either) as it would be a nice gig.

Are you writing your own contract or getting legal people to draft you one or something?.

I have no idea on this one. Going to speak to someone I know who freelances regularly. Again, another not good sign on my part.

Thanks all for the feedback, is very useful (especially TheFAQQer for your very comprehensive post).

I'll have a think, I've realised that at the very least it'll probably take me a while to get paid, just read a thread from someone else talking about that. I have another permanent interview next week so will see how that goes too.

Cheers again.