Invoice dispute, opinoin sought

Invoice dispute, opinoin sought

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Discussion

flatplane

Original Poster:

3 posts

67 months

Thursday 30th August 2018
quotequote all
Looking for unbiased, 3rd party opinions on this. I’ll try not to make it clear what party I represent, but that may make the information a little sketchy?
Company A – The Client
Company B – The Contractor
Company C – The sub-contractor
Company D – The sub sub-contractor

Company A ask company B to build them an exhibition Stand that involves printing services.
Company B ask company C to supply the printed materials as they do not have printing facilities.
Plans, costs and deadlines are agreed.

Company B collects printed materials from Company C in order to go and build the exhibition stand.
Company B then claims that the printed materials are the wrong size. Plans are checked and they have indeed been printed the wrong size. Company C apologises and explains as it was a rush job they subbed it out to company D.
Company B take the printed materials anyway as there is no time to correct.

Company C send invoice to company B
Company B say they are not paying as they didn’t get what was ordered and claim between extra costs incurred in trying to build the stand with the wrong size materials and a reduced Client fee due to the error, they are already losing more than the value of the invoice.
Company C say invoice is due as the printed materials were accepted.

Company C starting court proceedings. How do you think this will go?

And before anyone asks, there are no written or signed contract terms.

hondafanatic

4,969 posts

200 months

Thursday 30th August 2018
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What amount of money are we talking about?

Simpo Two

85,147 posts

264 months

Thursday 30th August 2018
quotequote all
Interesting. The product was wrong but was used anyway, and there's no contract. There must however be something in writing, eg 'Print it X x Y mm'.

The sum of money is important because if it's small, I suggest the aggrieved parties have a spat and walk away. If it's a lot then somebody might think it's worth doing some legal sabre-rattling. Small Claims limit is £6K IIRC; after that it gets expensive.

Plan C: Send it to Judge Rinder? spin

anonymous-user

53 months

Thursday 30th August 2018
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B is liable to C for the cost of what was supplied. But B has a counterclaim for losses it can prove it has suffered by reason of the mis-sizing. The extra costs incurred in working with the mis-sized materials may be tricky to recover if that is in reality just additional employee time incurred by company B.

As to how it will go: unless one or both of B and C are run by nutters, a deal will be done that neither side is particularly happy at but which both sides can live with. Unless there is a lot of money at stake B and C are much better off doing that deal before lawyers get too far into it. It has the air of a dispute where the legal fees will be hefty compared to what's at stake.


Si1295

362 posts

140 months

Thursday 30th August 2018
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My view would be: Company B should have negotiated a reduction in cost at the time/shortly after or (depending on the wording of the original contract between company B & C) had the work completed elsewhere and charged company C for additional costs. Simply refusing to pay the invoice isn't acceptable. The courts view may be that there should be a reduction in the invoice amount as, despite being delivered and accepted, the product wasn't to the original spec.

Probably best to start the negotiations now before either or both sides end up with legal costs


InitialDave

11,853 posts

118 months

Thursday 30th August 2018
quotequote all
I feel that they should have had the "we aren't very impressed, but have no choice but to try and make it work, so will accept the incorrect printwork but at a reduced price of £X" type conversation as soon as they found the issue.

If the incorrect stuff supplied would just be binned and need redoing from scratch, then them using it has avoided that (and the resultant costs of doing it twice). It might be sensible for C & D to look at how doing the job twice would have impacted their profit on the job, and open negotiations with an appropriately reduced fee rather than demanding full original pricing.

Compromise from both sides with consideration for whether they wish to do business with each other in the future seems sensible.

RicksAlfas

13,354 posts

243 months

Thursday 30th August 2018
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One of my pet hates.
"We're not paying as my client wasn't happy... but they've used them anyway".
rolleyes

It comes down to a battle and a war job. "C" digs their heels in to get paid, "B" will never use them again.
Does "C" want to lose the future work, or will they be glad to never see "B" again?
As mentioned above, the usual way out of it is some compromise that everyone begrudgingly accepts.



Another pet hate: exhibitions take ages to book and plan. Why is everything to do with them always so last minute?!
hehe

flatplane

Original Poster:

3 posts

67 months

Thursday 30th August 2018
quotequote all
Not a massive amount in the scheme of things - under £2000, so small claim territory.

anonymous-user

53 months

Thursday 30th August 2018
quotequote all
flatplane said:
Not a massive amount in the scheme of things - under £2000, so small claim territory.
That is nowhere near enough to warrant getting bogged down in proceedings. B and C should do a deal asap.

I would imagine C is suing because it has paid D, and did so before it found out about the problem with the sizing. So in the musical chairs game, right now C is the player without a chair.

EddieSteadyGo

11,717 posts

202 months

Thursday 30th August 2018
quotequote all
Whilst there is no written contract, based on your description, C accept that they didn't deliver the sizes as ordered by B.

The fact that C apologised for the error means the goods weren't just accepted - they must have been measured to identify the error. I assume at that point a discussion would have taken place about whether the mistake could be rectified etc. Can you clarify at what point the error was identified, and what conversations if any took place to discuss possible remedies? Also, I am assuming a reasonable person would consider the errors to be significant - is that right?

Whilst there isn't a contract, C will have a standard set of terms and conditions which will likely cover their liability for consequential losses. I suspect it says they are not liable in most normal cases. If that is the case, B can't just say "my client didn't pay hence I am not paying you".

Subject to the points above, B refusing to pay the entire invoice is not reasonable as they did get some value from the materials. If they wanted to take this approach, they would have needed to reach agreement at the time the items were collected from C.

Whilst C have started a money claim on-line, there is still lots of opportunity for a compromise to be reached.

If I was B (or indeed C for that matter), I would think a large reduction in the invoice cost maybe approaching 50% would be about right. This will cover their materials but remove their profit which is probably fair. C will then need to review their paperwork to see if it was their error or if D need to help them out on their invoice too.

Edited by EddieSteadyGo on Thursday 30th August 12:55

Marcellus

7,111 posts

218 months

Thursday 30th August 2018
quotequote all
Clearly there are contracts even if it was only a phone call from B to C and then separately C to D asking them to print xyz.

I think if it went to a court then it would be ruled that B accepted delivery of the materials as they used them (albeit with some fudge) and therefore B is liable to pay C the value of the invoice.

The question I have is does C ever want work from B again? if so C should/could make some offer of compromise and get D to compensate them whatever they discount to B assuming D wants future work from C.



SpeckledJim

31,608 posts

252 months

Thursday 30th August 2018
quotequote all
I think the argument is between C and D.

B shouldn't be paying, IMO, for a different item than was ordered. If, due to a lack of time, B were forced to use it, rather than have another made, that's incidental to the mistake on the sizing.

Whoever made the mistake at C or D should be the ones not to be paid.

(B probably just has to suck up the cost in terms of reduced fee from A. Just one of those things)


EddieSteadyGo

11,717 posts

202 months

Thursday 30th August 2018
quotequote all
SpeckledJim said:
I think the argument is between C and D.

B shouldn't be paying, IMO, for a different item than was ordered. If, due to a lack of time, B were forced to use it, rather than have another made, that's incidental to the mistake on the sizing.

Whoever made the mistake at C or D should be the ones not to be paid.

(B probably just has to suck up the cost in terms of reduced fee from A. Just one of those things)
Depends what C has in their terms and conditions. Just because A can insist on a discount from B, doesn't mean necessarily that B can automatically pass that onto C. It really does depend.

And again, B can't just assume it can take and use the printed materials, even if they are not correct, and then just not pay for it.

Think we need a bit more info on the op to clarify some of these loose ends.

SpeckledJim

31,608 posts

252 months

Thursday 30th August 2018
quotequote all
EddieSteadyGo said:
Depends what C has in their terms and conditions. Just because A can insist on a discount from B, doesn't mean necessarily that B can automatically pass that onto C. It really does depend.

And again, B can't just assume it can take and use the printed materials, even if they are not correct, and then just not pay for it.

Think we need a bit more info on the op to clarify some of these loose ends.
But that's tantamount to saying C can make something other than what was ordered by B, and as long as their customer is up against a deadline, can expect to be paid for it.

Doesn't seem very fair to me.

I've spent more time on the placing orders for marketing materials side of things than on the taking orders for marketing materials side of things, and if a supplier caused me a headache by supplying, at the last minute, something 10% bigger than the thing it's supposed to be mounted on (for example), then the last thing I'll be expecting is an invoice for it.

(agree, some more detail is needed)

EddieSteadyGo

11,717 posts

202 months

Thursday 30th August 2018
quotequote all
SpeckledJim said:
But that's tantamount to saying C can make something other than what was ordered by B, and as long as their customer is up against a deadline, can expect to be paid for it.

Doesn't seem very fair to me.

I've spent more time on the placing orders for marketing materials side of things than on the taking orders for marketing materials side of things, and if a supplier caused me a headache by supplying, at the last minute, something 10% bigger than the thing it's supposed to be mounted on (for example), then the last thing I'll be expecting is an invoice for it.

(agree, some more detail is needed)
As I said in my original post, it all depends upon factors including how significant the errors were, what discussions took place to allow the issues to be remedied, and what the terms and conditions are for company C.

dudleybloke

19,717 posts

185 months

Thursday 30th August 2018
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Demand trial by combat.

Tryke3

1,609 posts

93 months

Thursday 30th August 2018
quotequote all
A, because like a lot of clients they are leaving everything for the last minute then harassing everyone for their stuff ffs

flatplane

Original Poster:

3 posts

67 months

Thursday 30th August 2018
quotequote all
Thanks for the different viewpoints, a mixed bag and some food for thought while the red mist settles!

I can't really give further info without revealing my hand. I am company B - More info: -

The exhibition stand consisted of 30 wall panels, each 1m wide. it is built with an aluminium frame and the panels slot into the frame (you'll know the kind of thing if you've been to a trade exhibition)

The client design (and client supplied artwork) had 22 of these panels covered in graphics making a continuous graphic.

When I collected the printed panels (supposed to collect and set off for install 250 miles away), I noticed they were too narrow (cut at 900mm wide instead of 1000mm (height 2.4m was fine)). This was a significant error as the stand couldn't actually be built with them like that.

The chap that was helping me load them into my van said he knew nothing of them (was just back from holiday). He checked my email with the size (correct size ordered) then checked the artwork (again correct and even had the cutting marks), said he didn't understand how it could be messed up especially as there were guide marks on the artwork. Called his boss and said the panels were wrong. Was told the boss would be back in 20 mins and would call me.

The 'Boss' comes along and I explain how fked up this is, he apologises. I ask 'Can we re-do the panels?' He says sorry but no time to re-do and actually his machine is broken and that's why company D printed them. Basically shrugged is shoulders.

My head spinning at this point thinking 'how can I sort this out', money was the last thing on my mind to be honest. (a big mistake on my part judging by some replies above).

I ended up cutting 22 new panels (plain white) to mount his graphics, but instead of one big continuous graphic, it had 100mm wide white stripes between every panel. It didn't look great.

I honestly didn't think he would bill me, I certainly wouldn't the other way round.

Fire away with anything that needs cleared up.

StevieBee

12,790 posts

254 months

Thursday 30th August 2018
quotequote all
Are you going to be doing any more trade shows with the same stand? If so, you are within you rights to request that the panels be supplied to the correct size so you have them ready to go for the next event.

You can then choose to either pay the invoice or accept the new panels and request a discount on the invoice to compensate for the initial error and enforced usage due to the time constraints.


EddieSteadyGo

11,717 posts

202 months

Thursday 30th August 2018
quotequote all
flatplane said:
My head spinning at this point thinking 'how can I sort this out', money was the last thing on my mind to be honest. (a big mistake on my part judging by some replies above).

I ended up cutting 22 new panels (plain white) to mount his graphics, but instead of one big continuous graphic, it had 100mm wide white stripes between every panel. It didn't look great.

I honestly didn't think he would bill me, I certainly wouldn't the other way round.
Oh dear - sounds like a right bodge.

Have you spoken with the 'boss' with regard to the invoice he submitted and explained the work you had to do to adjust the display? Did you explain afterwards how much difficulty it caused you?

At this point there isn't much you can do. Just fill in the paperwork making clear your intent to dispute their claim. Make sure you comply with all of the milestones set by the court case and just tick the box to say you are happy to go to mediation.

Most likely this will go to mediation and he will ask for a proportion of his bill (which might be the worth accepting as even minor court cases can consume a lot more time and effort than they are worth as people start to become entrenched).