Reply to: client refusing to pay...project 90% finished

[Taita]

jonson did the emails have the full name of the person who you did the work for?

If they didn't then go and see a solicitor.

If they did look at the links NorthernLadUk has pointed you to and follow the examples given.

See a solicitor is best but be aware that he/she is likely to charge upwards of £100 per hour unless you get 'no win no fee' deal. I have known them to charge more than an hour for composing and dispatching a one page letter.

[Safe Collections]

A contract requires four essential parts to be binding; offer, acceptance, consideration and an intention to create legal relations.

I can't comment on your situation as I'm unaware of the full details, but as an example it would work like this:

<Negotiation>
A: What's your day rate?
B: £400 a day?

<Offer>
A: I want you to work for 8 days at £400 a day

<Acceptance>
B: Okay I'll come in on Monday and start

<Consideration>
A gets 8 days of B's time
B gets £3200

<Intention to create Legal relations>
As this is business to business, there is a presumption that there was an intention to create a legal agreement and it would be for A or B (as the defendant) to argue there wasn't. The fact that B turns up on day 1 to work and A lets them work on the system would be near impossible to argue against.

A contract does not require a prescribed form unless it's a specific type of contract, mostly to do with land purchases etc. So you do not need a written contract. All you need to do is to be able to prove the four items above. E-mail evidence is acceptable.

It is important to note here, your best option in a situation like this is typically not for breach of contract, but is an action for an agreed sum. It is typically easier to argue that you have performed a contract and are due money than arguing that the other side have caused you damage by not performing their side of the bargain.

If you want to do this yourself then you would write a Letter Before Action, google it you'll find plenty of templates. state how much you require, what it is payment for, how long they have to pay and a method of payment (cheque, bank transfer, both, etc). That is all and it should be no longer than ten lines. Do not waffle, chances are they'll ignore it anyway. When the period of time is up, you fill in an N1 form (if small claims which I'm assuming) and pop it off to Northampton. Alternatively you can get a solicitor to draft it for you. If under £5k it's small claims and you can't recover legal fees. You can claim for interest from the date that payment was due, currently it's set at 8% and the debt will continue to accrue interest until the date it is paid.

Any questions give me a shout.

Great advice from incognito as always, specifically relating to the offer, acceptance, consideration and an intention to create legal relations.

From here it would appear that the above have likely been met in the email correspondence between your company and the naughty client.

However this:

If they reply, and say "what are you talking about" that's fraud, you call the police and they get several months in the slammer.

Whilst probably posted in a spirit of helpfulness, is not accurate. One unpaid invoice does not qualify as a fraud and getting the police to investigate what they will see as a civil business matter is nigh on impossible...

Send a letter stating the facts and demanding payment in seven days, no payment or response in seven days its time to take action.

You may want to have a look at our article on ContractorUK titled How contractors can get paid, if all else fails.

Good luck

[d000hg]

Sounds pretty cut and dried to me. Unless they can show you demonstrably didn't do what was paid for they are just trying their luck... or one of their guys said you hadn't done the work right and 'had to re-do it'.

Make sure they know you are not going to roll over and then just go through the steps advised. How many hours you worked isn't the issue except to show you went above the call to get things done in good faith, maybe.

Good luck!

[Wanderer]

suddenly I am informed that they won't pay me because it was not finished...

From what you have said, you were engaged to work on a day rate. Therefore, even if they left you sitting there twiddling your thumbs for the whole time, they still have to pay you.

There's some good advice from Incognito. Also do a search for "dunning" on this forum and there is a lot of discussion but if you've used the likes of Thomas Higgins to send a letter before action then it's probably worth just going down that road.

Presuming you wouldn't bother working for them again, you can also add Interest and a penalty to teach them not to take the piss in future.

[Incognito]

No contract, just E-mail agreement. I have records of all the email conversations which are quite lengthy...but basically client asks my day rate...I say XXX per day...that is it, she says she wants me for an 8 day booking.

No project milestones are discussed, just day rate...
Even using this logic, the concepts were done and used, so 3 days should be due...but no, they won't pay nothing...The amount is large so please no "learn a lesson and move on" horsecrap...I need real help

Surely only a day rate was agreed, and that should be that? if there were milestones, should they not have been discussed in a contract before booking me? it seems they are just adding clauses after the job is done....I charge for my time, that is it...you pay regardless...

A contract requires four essential parts to be binding; offer, acceptance, consideration and an intention to create legal relations.

I can't comment on your situation as I'm unaware of the full details, but as an example it would work like this:

<Negotiation>
A: What's your day rate?
B: £400 a day?

<Offer>
A: I want you to work for 8 days at £400 a day

<Acceptance>
B: Okay I'll come in on Monday and start

<Consideration>
A gets 8 days of B's time
B gets £3200

<Intention to create Legal relations>
As this is business to business, there is a presumption that there was an intention to create a legal agreement and it would be for A or B (as the defendant) to argue there wasn't. The fact that B turns up on day 1 to work and A lets them work on the system would be near impossible to argue against.

A contract does not require a prescribed form unless it's a specific type of contract, mostly to do with land purchases etc. So you do not need a written contract. All you need to do is to be able to prove the four items above. E-mail evidence is acceptable.

It is important to note here, your best option in a situation like this is typically not for breach of contract, but is an action for an agreed sum. It is typically easier to argue that you have performed a contract and are due money than arguing that the other side have caused you damage by not performing their side of the bargain.

If you want to do this yourself then you would write a Letter Before Action, google it you'll find plenty of templates. state how much you require, what it is payment for, how long they have to pay and a method of payment (cheque, bank transfer, both, etc). That is all and it should be no longer than ten lines. Do not waffle, chances are they'll ignore it anyway. When the period of time is up, you fill in an N1 form (if small claims which I'm assuming) and pop it off to Northampton. Alternatively you can get a solicitor to draft it for you. If under £5k it's small claims and you can't recover legal fees. You can claim for interest from the date that payment was due, currently it's set at 8% and the debt will continue to accrue interest until the date it is paid.

Any questions give me a shout.

[SarahL2012]

Emails stand up in court

Back in permie days we successfully used an email trail to evidence to a QC what the parties intentions were, even though the contract was quiet on a specific point.

I would advise printing everything, packaging it all together with a letter to your client (is she the most senior person or is there someone above her you can approach).

Formalise a schedule with everything that happened from the moment that you were first approached to do the project, when the rate was agreed, through to completion. Ensure everything sounds VERY formal. No opinions, just hard facts

Draft a covering letter saying that you will take legal action if outstanding debt not paid within 7 days. Attached schedule and copies of all emails and send recorded delivery.

If they think you're willing to go legal and have already put your case together then they might finally pay up.

[SueEllen]

why bother contracting? at all? contract or no contract if the client doesn't want to pay, they get away scott free....that is the last time I go direct...people talk crap about agencies but at least they offer protection...

Agencies can go bust, can refuse to pay up or can delay paying. for a long time.

Have a search on this forum as there are a few agencies that have done this.

luckily I have a very well paid contract with Sky now, so just have to hold out 3 weeks till I get paid from them...and then I want to goto court over this amount...I want it in full, no 10% sale to a debt collector

Generally the threat of taking them to court or using a debt collector gets them to pay.

However there are some individuals who know how to get around the court system which is why using a debt collector is better with these individuals.

[chef]

How much are we talking about here?

You mention 200pounds expenses and 3 days work. Frankly that isnt so much given my expenses bill for this week alone (3 days on site) is around the 1500 euro mark. Im guessing your debt is around the 1000 pound mark total? If its smaller than 10grand amount then you can goto small claims court which costs a few hundred and takes a while but is likely to fall in your favour even without a contract.

If its a few hundred then you're likely to spend more on legal costs than you are on the debt due.

You mention no messing around, this is serious money and I believe it is from your point of view, however, you saw the big money and yet didnt decide to have a proper contract drawn up even though its serious money.

Personally I lost around 10grand on a client who went bust and that very nearly took me down with it at the time. Lesson learned for the future, if you're going to take the big money jobs then make sure you're protected in all ways possible for when things go wrong.

I understand its not everything you want to hear but before you spout the "whats the point if they dont pay me" then consider you were a bit naive not having a contract and proper terms drawn up in the first place i.e they saw you coming and took advantage of your bad business mistakes.

[BlasterBates]

I would expect that you can get your money.

Firstly you send them a demand. If they don't reply then you follow through and getting your money is automatic.

If they reply, and say "what are you talking about" that's fraud, you call the police and they get several months in the slammer.

If they complain the work wasn't up to scratch, how do they explain that you kept coming in day after day presenting half finished work. That won't wash either.

I think a threatening letter or two will get them to cough up.

[jonson]

Yes they can.

You print the emails out making sure you include the headers in your print out.


Have a search on this forum for a debt collector. If the company doesn't pay up it's likely to be quicker and more profitable to get a debt collector to chase them up than to go to court.

Court proceedings can take months and there is no guarantee you will get money at the end.

There as a good debt collector will tell you whether you have a chance of getting the money.

BTW you can't send them a court letter straight away. You need to first
send them an overdue invoice letter - use a lot of red on it. Giving them 30 days to pay. Send the letter to the company director using special delivery.

why bother contracting? at all? contract or no contract if the client doesn't want to pay, they get away scott free....that is the last time I go direct...people talk crap about agencies but at least they offer protection...

luckily I have a very well paid contract with Sky now, so just have to hold out 3 weeks till I get paid from them...and then I want to goto court over this amount...I want it in full, no 10% sale to a debt collector

[SueEllen]

I can prove both, this is why I am asking about the emails...will they pass as evidence in court? I heard about someone getting an audit trail from Hotmail once, how on earth do you contact them their address is hidden

Yes they can.

You print the emails out making sure you include the headers in your print out.


Have a search on this forum for a debt collector. If the company doesn't pay up it's likely to be quicker and more profitable to get a debt collector to chase them up than to go to court.

Court proceedings can take months and there is no guarantee you will get money at the end.

There as a good debt collector will tell you whether you have a chance of getting the money.

BTW you can't send them a court letter straight away. You need to first
send them an overdue invoice letter - use a lot of red on it. Giving them 30 days to pay. Send the letter to the company director using special delivery.

[jonson]

If it goes further you need to be able to prove:
1. Prove you had a contract
2. You did the work to meet the contrac t obligations

I can prove both, this is why I am asking about the emails...will they pass as evidence in court? I heard about someone getting an audit trail from Hotmail once, how on earth do you contact them their address is hidden

[jonson]

jonson did the emails have the full name of the person who you did the work for?

If they didn't then go and see a solicitor.

If they did look at the links NorthernLadUk has pointed you to and follow the examples given.

yeah thanks for those links checking them now...Yes the emails had full names, and were sent from the company email address...I have emails saying 'great job' and 'looking great' etc, the day rate talks, the 8 day booking talks (ended up doing 9), everything is there...

Anyway I got money last time through Thomas Higgins, even though I was opted out with the agency, so will use them again I think...try to get them scared with the court letter...which I will follow through

[SueEllen]

but come on, freelancers must have some protection against this stuff?

There is no legal protection.

Contracts in England (and probably the rest of the UK) are gentlemen's agreements.

So you can have a verbal contract, contract scribed on the back of the envelope or a proper written contract.

The onus is now on you to chase for payment.

If it goes further you need to be able to prove:
1. Prove you had a contract
2. You did the work to meet the contrac t obligations

[SueEllen]

jonson did the emails have the full name of the person who you did the work for?

If they didn't then go and see a solicitor.

If they did look at the links NorthernLadUk has pointed you to and follow the examples given.