Reply to: daily rate agreed in email correspondence(outside contract) - does it have any value?

[Taita]

I've invoiced for the first six weeks at £300 + additional VAT and that was paid. No problem with that. Things are not edgy (yet, and I hope the won't get). I agree on the previous advice that in business there are no friends, but things are not that bad - I am pretty sure we will solve it amicably but I preferred to get the honest advice about what such emails could count, which is - not much from what I can read. Once again, everything that was said is sound advice but I reiterate that we are still in very good terms and most likely things will be agreed without having to go to court or anything else.

You are on 'friendly' terms and there is 'trust' between you. You have been paid the first tranche including VAT. You are starting your 7th week. TALK to your friend NOW.

[LisaContractorUmbrella]

I've invoiced for the first six weeks at £300 + additional VAT and that was paid. No problem with that. Things are not edgy (yet, and I hope the won't get). I agree on the previous advice that in business there are no friends, but things are not that bad - I am pretty sure we will solve it amicably but I preferred to get the honest advice about what such emails could count, which is - not much from what I can read. Once again, everything that was said is sound advice but I reiterate that we are still in very good terms and most likely things will be agreed without having to go to court or anything else.

I think what you're asking is where you stand in law. If so (& IANAL) I would say that you would have little recourse - the term 'market rate' cannot be easily defined and I am fairly sure has no basis in law. If you are on good terms with the client then you could negotiate from the basis of your value to their company but if you were prepared to work for x rate for 6 weeks and your role will not change in the second 6 weeks I am not sure how far you would get unless the work you've done has increased revenues/productivity/efficiency for them.

[SueEllen]

Having read a few posts here of contractors benched and not finding it easy, I would go gently with your negotiations. 300 and a bit more is better than 0.

If the rate is a bit low put some feelers out.

Since the company is relying on funding there is a risk he could get 0 anyway.....

[BlasterBates]

Having read a few posts here of contractors benched and not finding it easy, I would go gently with your negotiations. 300 and a bit more is better than 0.

If the rate is a bit low put some feelers out.

[tractor]

...

I've invoiced for the first six weeks at £300 + additional VAT and that was paid. No problem with that. Things are not edgy (yet, and I hope the won't get). I agree on the previous advice that in business there are no friends, but things are not that bad - I am pretty sure we will solve it amicably but I preferred to get the honest advice about what such emails could count, which is - not much from what I can read. Once again, everything that was said is sound advice but I reiterate that we are still in very good terms and most likely things will be agreed without having to go to court or anything else.

I don't really see what the problem is apart from the fact that you don't have it in writing. Your email is worth less than nothing for the next 6 weeks. Finish up the contract, if you can get an increase all well and good, if you cannot, it's not the end of the world.

Just remember next time that you must get all key elements of an agreement written up in a signed contract before you begin work on the next one.

[luki]

Have you been paid any money yet for the first 6 weeks of work that you have completed?

If not, then I would suggest raising an invoice at £300 per day and presenting it to your customer. Make sure that you are addressing it to the correct legal entity and from your correct legal entity (include your Company Registration number). If you aren't VAT registered, then clearly the rate would be a total of £300 per day. If you are VAT registered, make sure to include your VAT Number on the invoice.

If you have been paid, then have you been paid according to a correctly raised invoice, or an arbitrary amount?

I know what I would be doing here, and it wouldn't include any further work from them until I had an agreed rate, in writing.

I've invoiced for the first six weeks at £300 + additional VAT and that was paid. No problem with that. Things are not edgy (yet, and I hope the won't get). I agree on the previous advice that in business there are no friends, but things are not that bad - I am pretty sure we will solve it amicably but I preferred to get the honest advice about what such emails could count, which is - not much from what I can read. Once again, everything that was said is sound advice but I reiterate that we are still in very good terms and most likely things will be agreed without having to go to court or anything else.

[Rhino 888]

Consider if you'd employed a builder on this basis.
He'd send you a bill for £300/day x 6 weeks and £??? a day for the rest.
How would you stand if you quibbled?

[TheFaQQer]

I'm in a 12 weeks contract where the daily rate was not specified in. The contract roughly says that the daily rate will be agreed in separate conversation, I do not have the contract with me to get the right wording but that is the sense.

Dangerous to sign a contract which doesn't explicitly say what the rate is going to be, or even exactly when it will be set and by what mechanism. If the client had said £100 a day, would you have been tied to the contract to do the work? Probably.

The daily rate was in fact agreed in an email conversation, in which we agreed for £N for the first 6 weeks, and "market rates" (higher than N) for the remaining 6 weeks.

Even more daft to not agree what the rate was going to be when you did get something in writing.

from the client's email: "let's do a 6 week contract after which we can extend out to another 6 weeks as we close on our seed funding. We should be able to offer you about 300 a day for the first 6 week period after which we have the next seed round of capital to allow us to deal with market rates." - we did sign a contract for 12 weeks.

So, how much are you getting paid? Where in the "about 300" did the client finally decide to set the price? This gets more and more silly the more I read.

Now, the client is stating that is unable to face market rates, didn't give me an answer yet on what rate (higher than £N) they might be able to pay, but I was wondering if such email has any value, in case we can't get to a friendly agreement?

Gosh, that is a surprise

The email is pretty worthless - it says that they should be able to pay you more, but in terms of making a commitment and sticking something legally worthwhile in there, it's useless.

[Scruff]

Have you been paid any money yet for the first 6 weeks of work that you have completed?

If not, then I would suggest raising an invoice at £300 per day and presenting it to your customer. Make sure that you are addressing it to the correct legal entity and from your correct legal entity (include your Company Registration number). If you aren't VAT registered, then clearly the rate would be a total of £300 per day. If you are VAT registered, make sure to include your VAT Number on the invoice.

If you have been paid, then have you been paid according to a correctly raised invoice, or an arbitrary amount?

I know what I would be doing here, and it wouldn't include any further work from them until I had an agreed rate, in writing.

it's not an extension. the contract is 12 weeks, the email agreement was £300 for the first 6 weeks, market rates for the remaining 6 weeks. we are just at the beginning of the 7th week

What is the market rate then?

Market rates go down as well as up!

[tractor]

...

Hi all,

I'm in a 12 weeks contract where the daily rate was not specified in. The contract roughly says that the daily rate will be agreed in separate conversation, I do not have the contract with me to get the right wording but that is the sense.

The daily rate was in fact agreed in an email conversation, in which we agreed for £N for the first 6 weeks, and "market rates" (higher than N) for the remaining 6 weeks.

from the client's email: "let's do a 6 week contract after which we can extend out to another 6 weeks as we close on our seed funding. We should be able to offer you about 300 a day for the first 6 week period after which we have the next seed round of capital to allow us to deal with market rates." - we did sign a contract for 12 weeks.

Now, the client is stating that is unable to face market rates, didn't give me an answer yet on what rate (higher than £N) they might be able to pay, but I was wondering if such email has any value, in case we can't get to a friendly agreement?

As soon as I saw....

"after which we have the next seed round of capital"

....I would have run away as fast as Dwayne on steroids.

But seriously, with this and some of the other threads in the last couple of days, what are people thinking? This is BUSINESS for God's sake! No schedule agreeing the rate? Nothing in the conversations so far has any value. If you take the phrase '...about 300 a day....' they could have paid you 100 and said well that is 'about' 300.

My advice? Find another contract and while you are doing that, read up on running a successful business, seriously.

edit:

Following your other answers, a few cliches you need to consider are there are no friends in business and don't mix business with pleasure. They are accurate.

[luki]

It's an extension.
There is no agreement in place for the extension, just some saw talk about it.

Did you think that meant the extension itself was guaranteed to happen?

At least they haven't said the extension is cancelled.

it's not an extension. the contract is 12 weeks, the email agreement was £300 for the first 6 weeks, market rates for the remaining 6 weeks. we are just at the beginning of the 7th week

[jmo21]

It's an extension.
There is no agreement in place for the extension, just some saw talk about it.

Did you think that meant the extension itself was guaranteed to happen?

At least they haven't said the extension is cancelled.

[luki]

If they can get someone (you) to do the work @ £300/day then they could legitimately argue that £300/day IS the market rate.

How much are you expecting to get... and is it worth losing the next 6 weeks contract for?

I was expecting £50/70 more, there is previous correspondence where I state my daily rate, and their counter offer was £300 for the first 6 weeks. Theoretically, 350/370 is what could be inferred as the "market rate", but again in up to interpretation of emails

[luki]

that's all sound advice; I'm sort of aware of it, and I'm not happy with what I've done, not to excuse myself but I am in a very friendly relationship with the client, I should have mentioned that, so there was a lot of "trust" involved.

I hope things won't turn sore, I was just wondering what value an email could have in the unlikely case things will have to go beyond a friendly agreement.