Late payment, reason to terminate contract?

[lazylabs]

Hi

If agency are late in paying an invoice is it possible for them to be in breach of contract and therefore contract can be terminated?

Cheers
M

[GillsMan]

Hi

If agency are late in paying an invoice is it possible for them to be in breach of contract and therefore contract can be terminated?

Cheers
M

Check the contract; there should be a clause about under which grounds a contract can be terminated due to a breach of contract. If the invoice is a few days late, I'd imagine it can't be terminated. What are the circumstances? How late are they? Is it more than one invoice? What are the payment terms (e.g. weekly, monthly, etc)? Are you looking for any excuse to terminate the contract?

With a bit more information we might be able to provide some advice.

[lazylabs]

Hi

Thanks for the response.

The payment terms are weekly. Timesheet submitted by 12 noon on the Monday for payment that Friday.

This has been working fine for 5 weeks and then I took 2 days off so submitted ts on Thursday and chased it on Monday cos it hadn't been approved and didn't get signed off till Tuesday evening. Other people onsite following same process had theirs approved on the Friday and some on the Monday. No reason given for why mine was not approved. They just said it wasn't approved in time. Ok so I let that go they said it would be paid next week ie today but no payment.

I read a few articles that this can be classed as a breach of contract? So services should be withdraw and then chase under the late payment act 2013.

[Andy Hallett]

Are you desperately wanting to exit the contract? I only ask because what appears to be a slight delay in payment 1 week out of 6 stacks up pretty low in the general scheme of unfairness issues.

[riffpie]

Hi

Thanks for the response.

The payment terms are weekly. Timesheet submitted by 12 noon on the Monday for payment that Friday.

This has been working fine for 5 weeks and then I took 2 days off so submitted ts on Thursday and chased it on Monday cos it hadn't been approved and didn't get signed off till Tuesday evening. Other people onsite following same process had theirs approved on the Friday and some on the Monday. No reason given for why mine was not approved. They just said it wasn't approved in time. Ok so I let that go they said it would be paid next week ie today but no payment.

I read a few articles that this can be classed as a breach of contract? So services should be withdraw and then chase under the late payment act 2013.

It can be classed as a breach of contract if payment terms are covered in the contract. Are they? Are the payment terms on your invoice being honoured? How reasonable to you think it is to withdraw service after one small incident of late payment? How reasonable do you think, for example, your electricity supplier would be in cancelling your supply permanently the first time you paid your bill a bit late? I'd put money on you looking for an excuse to terminate. Why not just terminate?

[lazylabs]

Terms say that timesheet has to replace employment business by 12 noon on Monday for previous week and fees are payable with 7 days.
Normally I wouldn't even think about a payment that a week or 2 late. But there are a few issues with this agency and position. I have multiple issues with them and the business and position. So yes I am looking for a reason to terminate without notice.

Surely if I just terminate without notice then they can claim the costs?

I've never terminated a contract early before. So. New ground for me but the circumstances around this contract as totally unacceptable.

[TheFaQQer]

Whether a contract can be terminated for breach depends on the severity of the breach - whether it is a breach of condition or a breach of warranty.

A condition is a major term of the contract which goes to the core of the contract. If a condition is breached the innocent party is entitled to repudiate the contract and claim damages, eg. Poussard v Spiers

A warranty is a minor term of the contract which is not central to the existence of the contract. If a warranty is breached the innocent party may claim damages but can not end the contract, eg. Bettini v Gye

Whether the payment terms would be classed as a major breach or not would be for a judge to determine - I'd suggest that a few days of late payment wouldn't be a good enough reason to terminate.

[northernladuk]

A single late payment is no way a breach and would never stand up in court. It's late, it isn't a breach in the agreement between the two parties. The world would be in a right mess if that was the case. It has to be a fair and reasonable approach. EE's phone network went down this week. Is that a breach so everyone can cancel their contracts without penalty? Is it chuff.

Consistently late or non payment can be considered a breach and will stand up but you have to make sure you have tried everything to get the money first. You can't just use it as an excuse to cancel the contract and walk off.

And on the point of looking for an excuse. This could be factored in to a decision if it does go to court and won't help your case.

[The Spartan]

You could also look into invoicing for late payment, there are plenty of threads on here how to go about it I myself have done it and it was really straightforward. Other than that make sure your PCG membership is up to date.

[northernladuk]

You could also look into invoicing for late payment, there are plenty of threads on here how to go about it I myself have done it and it was really straightforward. Other than that make sure your PCG membership is up to date.

Absolutely. A well worded letter showing you know the rules around this and a demand for more money based on your rights often has them jumping to attention.