"Invoice will be paid by" payment term in contract

[theroyale]

I've just come out of a contract that has ended a little messily; the client has genuinely landed themselves in massive financial trouble, and now the agency is saying they won't pay me unless the client pays them. I've successfully argued to the agency's director that my contract being honoured has no dependency on the client paying them - but the sticking point now is the duration: the agency is telling me - correctly - that there is no set time within which they will have to pay me, and at the end of a long heated discussion last week I got them to agree (in writing) to a within-45-days payment on all outstanding invoices.

I understand the whole thing is part of being a business, but I would like to ensure that my next contract is a little tighter if possible so I won't potentially be waiting 2 months for my money. Is it "ok" (i.e. is it done, standard etc etc) for contractors to enforce a "pay within x days" clause in their contracts? If so how many days? In an ideal world if I am invoicing weekly and an agency tells me verbally "We normally honour your weekly invoice by friday next", i.e. 10 days, then I'd like to see that go into my contract.

[Spacecadet]

Just because there are no payment terms stated in the contract doesn't mean that there are no payment terms.
Payment terms are usually 30 days, so it is a fair assumption to make that an invoice should be paid within a month.

[SueEllen]

There is no set time in law when payment is due it's what's agree. So therefore you need to make sure your payment times are in the contact.

Some companies will only accept monthly invoicing and will pay 7, 14, 30, 60 or 90 days after receiving the invoice.

In future put payment terms into the contract. Try and get 7 days after invoicing whether you are invoicing weekly or a monthly, and add a clause that services will be discontinued if payment is not received within that time.

Be pleasant and say I know you will pay but to make it clear to both sides we should have this agreed in writing. If they decide to be awkward then unfortunately you are going to have to get a solicitor to draft the terms.

[doodab]

The late payment of commercial debts act says interest can be charged after 30 days unless something else has been agreed.

Late Payment of Commercial Debts (Interest) Act 1998 (c. 20)

[VectraMan]

WHS. Now you've agreed 45 days you can't do much else, but I would have started proceedings against the agent as soon as it looked like a problem (proceedings being a solicitors letter informing them of your intent to start adding interest at the 30 day point and the threat of further action).

I'm not sure you'll get that far insisting on your own payment terms with agents, and even if you do it won't guarantee that they'll pay. It'll still be up to you to take legal action to enforce the terms. So you're not really any better off.

[Wanderer]

I've successfully argued to the agency's director that my contract being honoured has no dependency on the client paying them

Good work. It's the agencies problem, not yours though. Your contract is with the agency not the client so tell the agency to pay up.

- but the sticking point now is the duration: the agency is telling me - correctly - that there is no set time within which they will have to pay me

As doodab says, by default it's 30 days unless otherwise stated. The agency will know this full well....

[MarillionFan]

Once had a similar type situation. Contracted through an agency that was primarily a perm recruiter. They didnt have experience of contracts, but were of course happy to add their 15% on top.

Anyway clientco was slow to pay them. I was on a month and after a couple they kept saying 'but we havent been paid, we cannot pay you until we get paid'.

Alarm bells ringing, I eventually went to HR and said this is not on. HR didnt like the agency either, and so I went direct and the agency was told to buzz off, and no there would be no sign on fee. They had six months of 15% for nothing, and so all parties just got on with it.

[thunderlizard]

You've done well to get the promise of 45 days in writing. That's a pretty good deadline.
Yes it's absolutely normal to put payment terms in your contracts. 30 days is OK - that's about the minimum you can expect from a direct client and about the maximum you'd expect from an agency.
We shouldn't forget that getting the money is more important than doing the actual work, and contract terms should reflect that.

[TykeMerc]

I always make sure payment terms are written into the contracts, usually 14 days. Apart from some negotiating (ok basically insisting) I've not had any hassle getting terms written in for the last 15 years.

I learned the hard way back when I used to supply hardware and labour and was left chasing >300k for months.

[d000hg]

You've done well to get the promise of 45 days in writing. That's a pretty good deadline.
Yes it's absolutely normal to put payment terms in your contracts. 30 days is OK - that's about the minimum you can expect from a direct client and about the maximum you'd expect from an agency.
We shouldn't forget that getting the money is more important than doing the actual work, and contract terms should reflect that.

If you're a public sector permie, maybe...