Reply to: Huge mistake! No payment until my client is paid.

[Bruno123]

Maslins - thanks, much as I know I should’ve read it all again, it was a bit naughty, wasn’t it? But it’s interesting how you’ve said the same - that it’s probably not a deliberate plan to avoid paying me. I hope you’re all correct and I’m overreacting! Yes, I’ll allow a reasonable timeframe and then pursue them.

[Maslins]

I think you're right to be aggrieved at the last minute switcheroo in the contract! As a minimum they should've highlighted what they'd changed.

However, as others have said, I wouldn't jump to the conclusion that they're a bunch of fraudsters. They may well have been stiffed on other work, where their end client was mega slow to pay, yet they had to pay their subcontractors swiftly. Hence their legal team decided this tweak was warranted.

If they don't pay within a reasonable timeframe, pursue it in the same way you would without that wording in the contract.

[Bruno123]

If so, you may be able to find out about payments from https://www.gov.uk/check-when-businesses-pay-invoices

Oh that’s really interesting, thank you. On this occasion it doesn’t bring up their client… but it’s made me think I could find other ways of investigating them directly. And that link will definitely help for future contracts. Thanks!!

[Protagoras]

It’s the sneaky way they changed the contract, and now the fact they’ve not responded to my messages regarding their payment terms with their client which unsettles me.

Is the consultancy's client a 'large business'? If so, you may be able to find out about payments from https://www.gov.uk/check-when-businesses-pay-invoices

[Bruno123]

Thanks ladymuck and BlasterBates … in fact, everyone who has taken the time to reply. Your comments have made me feel better! I guess the pay-when-paid thing isn’t that uncommon, and hopefully the “they can’t just deny being paid” thing is true. If they’d been upfront with the terms from the start, I wouldn’t have doubted their intention to pay me. (Although I wouldn’t have taken the contract and this thread wouldn’t exist, but still!!!)
It’s the sneaky way they changed the contract, and now the fact they’ve not responded to my messages regarding their payment terms with their client which unsettles me. I really hope I’m wrong, but I just see a future where I leave it 30 days from the invoice and request an update - “oh we’ve not been paid yet”, 45 days “oh no we’ve still not been paid”, 60 days… you get the picture. I guess eventually I’d just have to take legal advice.

[BlasterBates]

This clause only allows them to delay for a while, they can't simply claim they never got paid. That isn't plausible unless the client went bankrupt.

[ladymuck]

I've had paid when paid contracts before. It's common with small consultancies that don't have the cash flow to bridge the gap between the client and you. It's worth trying to get an idea of what their payment terms are with their client so you can get some idea of when the cash will come to you.

It's cheeky they didn't raise the change of payment terms with you and I'd chalk that one up to experience rather than assume they were trying to screw you over. That said, you being paid within 30 days of them receiving payment is a bit long but you've now signed the contract so you can't negotiate. I'd ask for within 7 days of them being paid - if a small company needs 30 days to process an incoming payment and match it to an outgoing one, then I'd be worried about just how bad their admin is.

[Bruno123]

Thank you, oh yes, if I’d they’d asked me to sign a different version of the contract I would have checked all that of course. My mistake was to assume the “problem” at their end was inconsequential and I just needed to sign the same thing again. Not that they’d changed anything. Still my fault of course, but it’s the first time this type of situation has ever occurred, so it wasn’t on my radar! It will be now…..
Calls and emails to ask when they think they might receive payment from their client have gone unanswered so far.

[PerfectStorm]

Hi… I’ve made a big mistake, can anyone offer advice please?
I made the mistake of not reading it in full for a third time, but skimmed, then signed. They’d substituted the clause of 7-day payment with “I will get paid within 30 days of THEM receiving payment from THEIR client”

To guard against this, there are some things you should do

1) When the contract arrives via email, select the option to print/download/complete offline or similar so it saves a PDF. Do this with all your contracts, both the unsigned and signed (and then countersigned) ones

2) Go into Adobe Acrobat and select the Compare Files feature. Put the old contract in on the left side and the new one on the right, select to analyse Text Only, and see what changes it can find

3) Sometimes it'll say that either or both document is protected against being compared (wonder why!) - to get around this, drag your PDF into a browser window which will display it - and Print it to PDF again. This will effectively strip away all the protection. Do this on whichever files need doing it, and you can run the comparison on the new reduced-security files.

[Bruno123]

Yes, I promise that’s exactly what happened… email: “sent your contract for signing again as something went wrong before”. Hence my feeling that this is “off”, but NotAllThere could be right, it’s just for their own protection and that’s fine, if it’s true. I’ve checked the finances and yep, my client has losses. But their client is mega - no issues there. So maybe they just need the cash before they pay me.

But if they’ve deliberately screwed me with no intention of paying, I really don’t know how I’d win this. I’ve signed a “pay when paid” contract, what can you do? Hence why, normally, I would run a mile from one.

Don’t know how I’m going to move forward though, that’ll give me something to think about over the weekend….

Thanks for your advice, appreciate it.

[northernladuk]

[FONT=Verdana]
It was then withdrawn and I had an email “oh, there was an issue at our end, can you sign again”… this is where I made the mistake of not reading it in full for a third time, but skimmed, then signed. They’d substituted the clause of 7-day payment with “I will get paid within 30 days of THEM receiving payment from THEIR client”
This has only just come to light because (of course) I’ve not been paid and I’m only now realising what's happened.

You are blaming yourself but if it went exactly as you say I'd be very unhappy they didn't either strike out the old one or at least mention it. To sneak it in with zero heads up is highly unprofessional in my opinion. It's a valid change, might be a standard contract that didn't reflect their current piece of work but pretty underhand to sneak it in with only a comment saying 'there was an issue' is really poor.

I'd agree with NAT though. They aren't out to screw you, just protecting themselves. This isn't uncommon in B2B contracts, we just don't see it often as agents factor payments and will pay us ahead of their payments from the client. They still cover themselves with terms like not getting paid if the client doesn't pay but they do swallow some of the risk with the factoring.

You've just got to make a call on the risk to you. Investigate the client and the consultancy firm. None of them want it to go t*ts up obviously but are there any indications it might. Look at the company house data on the consutancy for example to see if they are losing money and so on.

When you've got that info then you've just got to make a call on it. You could argue quitting because of a situation that might not occur might be a kneejerk but depends on how quick you can get something else. On the other side if you see it through you could gain a new regular client.

But remember this isn't uncommon when going direct. Agencies give us a bit of break that often we don't appreciate.

[Bruno123]

Oh yes, I've got all the proof and I've asked the question so we'll see. It feels off but hopefully I'm wrong. Thanks for your advice though - appreciate it.

[NotAllThere]

Until your paid, you're a creditor. Even if they retain the money, you'd still show up on their accounts. You've got a contract and timesheets, presumably, showing you're owed money. If it went to court, the onus would be on them to prove that they hadn't been paid.

Best thing to do is talk to them. "Hey, I just noticed I don't get paid until you do. Can you tell me when you expect to get paid, so I can understand when I'm to be paid". It's not difficult.

[Bruno123]

Thank you NotAllThere - I just assumed the worst, that it's an easy way to get out of paying me, as how could I ever prove/disprove they'd received the funds from their client? I've always steered clear of (or asked for a change to) "you're paid when we're paid" contracts before for this very reason.. but... you know the story here.
I'm very reluctant to do any further work though, but if they ARE genuine I don't want to throw my toys out of the pram.
I've never kicked myself so much!!!

[NotAllThere]

I would assume they're not trying to screw you over (too much) and if they get paid, then so will you. Why not just ask them when they expect to get paid. If the money doesn't arrive 30 days after that, start dunning.