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Unpaid invoice - quick help please?(20 Posts)
I would appreciate a broad view on my position with regards to an invoice that was issued for my work done (as a subcontractor) on a project last year.
Broadly speaking, I was site-finding for a developer. Developed a relationship with a landowner, brought them to the developer, site accepted by developer, planning permission submitted (and granted).
It turns out that developer's solicitor cocked-up with the legals and that the developer currently has no exclusivity over the land so the landowner now holds all of the cards (as planning has been granted making their land very valuable).
This was discovered just after I issued my invoice around 4 months ago (as yet unpaid). I have been chasing through an agent of the company (who has assured me it was being processed and has at no point suggested the invoice won't be paid).
Now it turns out that they are trying to get out of paying the agent too, so I am passed over to deal with the company directly.
First direct contact this morning, start out neutrally:
I am writing to chase-up payment of our overdue invoice xxxxxx.
I understand that xxxx are no longer project managing the xxxx project and that I need to deal with you directly regarding the payment of this invoice.
I have attached a copy for your reference. Our payment terms are 30 days from issue of invoice, so this is now 4 months overdue. I would appreciate it if you could organise payment of this promptly.
Amazingly, they have come back with:
Thanks for your mail. I understand that work has been done for completing the option agreement. However, we are far from satisfied with the terms stated as they are quite unfavorable from a financial point of view. Hence, we are not willing to pay the whole amount but 30 %
If you agree you are welcome to send us a credit note and a new invoice and we will proceed with the payment.
Thanks in advance
To be honest, the original invoice is for just over £10K and whilst it would be amazing to get the full-amount paid, I am tempted to take the money as cash-flow is a problem due to this non-payment and the fact that I have been on mat leave since finishing the project so have no more expected in. I don't have the money to risk taking this to court and losing.
I was tempted to reply:
Thank you for the quick response, however, this invoice has been with you since December and this is the first that I have heard of your non-intention to pay the full amount.
I am glad that you agree that my work was completed satisfactorily. I understand from xxxx at xxxx that due to a series of events after my involvement in the project had ended, this project is now on hold. I understand that this is frustrating for you, but I must be clear that as a subcontractor, these losses are not my responsibility and I would not expect to absorb the cost of them.
As it stands, 30% of my original invoice would not cover costs incurred by me on work for xxxxx. However, I am keen to resolve this as soon as possible as I have been waiting for payment for such a long time. I therefore suggest that I settle for a payment of 60% of the original invoice.
I assume they have in-house legal advice, are they likely to advise setlling if I send that? Or should I push for the full amount?
Thanks in advance for any advice!
A lawyer would start by asking to see the contract - written contract if is one. If non written contract the emails confirming you would be paid £10k. Do you have any proof of the sum agreed to be paid and by exactly whom - the limited company your contract is with?
Thank you for responding, Lotus This is where I stupidly fall down. All correspondence was with the agent company up until this point (apart from the invoice which is addressed to then directly). There was a sliding-scale of fees depending upon the size of the site(s) acquired. This is the only one in limbo. No up-front contract for this site specifically.
I wondered whether their non-querying of invoice since December improved my position?
Did you send your sliding scale to the agent? Did the agent confirm in writing that they were agent for the company you have invoiced?
The sliding scale came from the agent of fees they (the developer) agreed to pay. They definitely were the agent, but not sure if this is stated for legal purposes. That doesn't seem to be in dispute anyway.
They seem to be agreeing that I did the work, but due to their mess-up they don't want to pay. I initially did negotiate financial terms with land owner, developer accepted those terms. Is now worth a lot less to them due to their solicitor's mess-up, but actually the land owner is likely to demand richer terms due to power shift.
I have been uncharacteristically
I wouldn't. They provided the sliding scale and confirmed they were agents. Maybe reduce to 70 percent but if you've got emails in writing where you were provided with the scale and they are not disputing the agent had authority to contract on their behalf then I don't think they have a leg to stand on. It's not your fault the project is worth less now.
Thanks again, Connor.
I feel like it's going to be a bit of "who blinks first" with this. I need the money, but they have the better lawyers. I'm going to consult with DH at lunchtime. The money being paid (even the 30%) will make a difference to the family finances. We aren't in debt but have NO spare cash at the moment due to this.
I may not be paying this enough attention, but who are we saying your contract is with and is obliged to pay the £10k? It sounds like you negotiated £10k or the sliding scale with an agent and they had authority to act for a developer and they could bind the developer. It sounds like you dealt with three different parties - a land owner, a developer and an agent of the developer so the starting point is who is your contract with who is obliged to pay you. Sound like you think it is the developer whose agent had authority to agree the £10k with you.
it is very hard getting small sums paid. Even up to £10k is counted as a small claim so neither side can recover legal fees. You could threaten to sue the developer if that is who your contract is with.
dont let them brass neck their way out of this as if you go to court you will most likely win but if you are feeling generous offer 60% or 70% otherwise they will attempt to do this to all their contractors because few if any would kick up a fuss (as you seem to be willing to take a massive loss) which causes massive knock on effects down the line
My husband is a self employed contractor and he get this alot even to the extreme cheek saying we are totally not happy with the product so we will not be paying you and we will keep all that you have done as well (software engineer was making a website in that instance)
Thanks Lotus & Worrid. I pushed back and they are now offering to pay 50% ox the invoice. I am torn between accepting for a quick resolution & holding out to see what more I can get them (the developer) to agree to.
Lotus the weird thing is that the developer isn't disputing that the invoice is theirs to pay, nor that I've done the work. The problem is that the sliding scale is related to size (& indirectly to the profitability of the site...number of houses* that can fit, for example). They accepted it as a development of x size worth £10k (for simplicity), but now seem to be saying that due to their solicitor's mistake the site is potentially going to have no houses* on so they don't want to pay the full amount!
*it's not a housing development
If the solicitor was indeed negligent, then they will have professional indemnity insurance to cover that eventuality. The developer should take the matter of the loss of potential income up with them, not expect you to suffer from their lack of care.
I would be holding out for the full amount. It's a horrible tactic to use on a small business, negotiating the fees down after the event.
now seeing your latest post I would agree with whattodo approch since they can claim any lose of value from the solictors that made the mistake.
you could also as a tactic start demanding intrest payments ontop of whats owed to get the ball moving as it is a totally horrid and unethical tactic to use tbh and they would not dream of attempting to do so to another big company / government entity as they expect small companies to be bullied etc
The solicitors made a crucial (potentially ruinously expensive) mistake in the final version of the agreement with the landowner. It was caught on the day of the meeting so that the signing was postponed pending a redraft.
In the mean time, & in complete sod's law, planning permission for the development was granted in record time (developer shouldn't really have submitted the application until the land was secured).
So now the land owner has planning permission on their land & isn't (legally) bound to a particular developer so can negotiate as they please.
So whilst the solicitor's mistake delayed things, it was the developer's decision to submit the application before securing the land that made I it catastrophic.
I too would be holding out fur the full amount.
Credit control is a game.
I play and play and play and try and hold off threatening taking it further, but don't give in yet.
In which case, the developer has shot themselves in the foot by jumping the gun. It was their error and lack of judgement, so the same goes - they may not have anyone to claim against, but they could have foreseen what might happen if planning permission were obtained before they had possession
unless they're numpties.
I'm not sure if you can claim that by accepting your introduction, they accepted your terms, but I'd be going down the line of threatening legal action to enforce your agreement with interest payable on the amount due after 30 days of the date of issue of your invoice.
If they're already at 50%, they'll definitely go higher, so keep pushing.
Incidentally, I see that the current rate of interest you can claim is 8.5% pa. The gov.uk website suggests issuing a new invoice which includes the interest due. Perhaps a letter warning them that a revised invoice will be issued would be a good first step.
It all comes down to what was "agreed" and if you can prove what was agreed as to the amount (and of course if they will pay up if put under pressure even if the terms you agreed were not clear. If you are pretty sure whatever formula you agreed is you are owed £10k then try to get them closer to that. They have offered £5k already now today so perhaps say you will settle for half the difference between your new positions of £7500 otherwise you will be issuing a claim against the developer.
If however the agreement with the developer was that you would be paid based on some kind of profit the developer would make and they now aren't making any then you may well not be owed £10k at all.
Hello all, thanks so much for your advice . I have settled at 50% . I know is cowardly, but we have a reasonable income expected in the medium / long term, it is now that we really need the money.
Also if you accept 50% but do not agree it is in full settlement if you feel like it within the next 6 years you could always sue for the balance (although it's more likely they will have made it clear in the emails that the sum you accept settles everything of course).
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