Full and final settlement... help with wording please...

[Ultraviolet]

Hello PH legal types

I'm trying to draft an email to make sure that the return of an overpayment by a customer for the services we provide also puts a formal end to the relationship (the contract is complete and we have no desire to work with them again). The overpayment was identified by us and caused issues with our accounts so I'm trying to leave the door open to claim these costs back when we know more. I don't want to wait until then before sending this email though and we are happy to write these costs off if necessary to get this finalised quickly and move on.

The customer has also had some other issues with their own contracting parties and their have been some rumblings about trying to pass these costs on to us (they are not contractually entitled to do so but I don't want to escalate into a discussion about contracts quite yet), so I am also trying to make sure this doesn't happen.

Anyhoo, I don't want (or hopefully need) to go into any more detail, but any thoughts on the wording below would be much appreciated...

cheers,
UV

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Dear xxxx,

Sadly you were right to state that this has caused inconvenience… we are currently working with our accountants to rectify the issues arising from this error; we will revert if necessary when more is known about the costs that have been incurred.

However, I am pleased that we seem to be on the way to reaching a conclusion – thank you for your help so far.

You state in your email below that there are no more invoices awaiting to be processed on your system. Thank you for this confirmation. We have also conducted a reconciliation and found that the totality of the discrepancy matches the amount confirmed in your email.

I do nevertheless want to be confident that there won’t be any further complications.

Therefore, and with reference to the various agreements that were entered into by our companies for the provision of services (details given), I would like to make it very clear at this juncture that our payment of £XXXXX will constitute full and final settlement in respect of:

(i) any and all amounts owed by us as a consequence of this work
(ii) any and all outstanding matters between the contracting parties, whether known at the time of this settlement or at any time thereafter

Please confirm your agreement to the above within 10 working days of this email. Note that in providing this agreement you will also be acknowledging that you are duly authorised to do so on behalf of XXXXX.

We will then proceed with the payment accordingly.

---

[akirk]

so, if I understand it, they have paid you too much?
so send the difference back and then don't deal with them any more...

I am not sure that I see why you would have any claim for costs from them for this
if there is no ongoing relationship once the refund has been made just move on

[Ultraviolet]

akirk said:

so, if I understand it, they have paid you too much?
so send the difference back and then don't deal with them any more...

I am not sure that I see why you would have any claim for costs from them for this
if there is no ongoing relationship once the refund has been made just move on

That would not constitute full and final settlement (which is what I am trying to achieve) and would leave the door open to future claims

[Chrisgr31]

Ultraviolet said:

That would not constitute full and final settlement (which is what I am trying to achieve) and would leave the door open to future claims

But you say we are trying to work out these costs and possibly claim them back. With a full and final settlement you wont be able to claim them back anyway

[Ultraviolet]

Chrisgr31 said:

But you say we are trying to work out these costs and possibly claim them back. With a full and final settlement you wont be able to claim them back anyway

That is why I said in my post we are willing to write them off to get the settlement agreed

[JustinP1]

Ultraviolet said:

any thoughts on the wording below would be much appreciated...

My main concern is not the wording, but what you are effectively trying to do:

If it is simply the case that the customer has overpaid, then you are duty bound to repay those monies. You're not is a position to withhold them.

What you are doing may possibly work in a practical sense, however, I'd play the situation out: If the company do want to make a claim against you, they simply won't agree to your terms, and ask for their overpayment, then once they have it, claim.

Even if you look at the situation in a hypothetical strictly legal sense, you are in effect offering a separate contractual agreement. For that to be a 'contract' there must be 'consideration'. Giving someone money that you owe them anyway is not consideration on your part, so this would not be a valid contract. So, if they are savvy, they could agree to it even if it said 'full and final settlement', and if they are minded to claim, do it anyway.

There may of course be another way to look at this situation from a legal perspective (as there usually is) but, this is my assessment from the facts given so far.

In short, you can't hold an overpayment against not fulfilling your obligations under a contract (presuming that a claim against you will be for breach of contract).

Edited by JustinP1 on Sunday 25th October 08:35

[dfen5]

I recently spent a morning trying to write such a letter. In the end I asked a solicitor I'd used before to help. £150 later it's properly sorted, plus some advice and experience thrown in.

If your time's better spent doing other things, I'd bite the bullet and give a recommended legal firm a call.

[Ultraviolet]

JustinP1 said:

Even if you look at the situation in a hypothetical strictly legal sense, you are in effect offering a separate contractual agreement. For that to be a 'contract' there must be 'consideration'.

Thanks, that's useful.

So if I rounded the amount up a bit, and described this as an additional consideration, would that achieve the full and final settlement (assuming they agreed to it; if they didn't then at least I would know some other issue was pending)?

cheers,

UV

[JustinP1]

Yes. I'd also remove the specific wording about things that may occur in the future - it just brings attention to it.

So, you could for example flesh out:

"We appreciate that X has caused you inconvenience, and are happy that our figures for payments now align.

In respect of bringing our dealings to an amicable closure, we would like to offer you the sums outlined, plus £250 (or whatever) in full and final settlement of the contractual relationship between X and Y in the contract to X formed on X.

On your agreement that this is acceptable, we will transfer the funds."

I'm not a lawyer, but I did study Law as a separate subject and in particular contract law as part of my Bus Mgt degree. I've also used that knowledge for the last 15 years in drafting contracts and T&Cs.

Of course, as has been said, the best way is to get professional advice and they can go through the paperwork in detail, and nothing can be a substitute for that. However, the general advice above hopefully points you in the right direction to take your own decision accordingly.

Edited by JustinP1 on Sunday 25th October 10:34

[andy-xr]

I think you're making more out of it than needs be, it needs to be a simple 'we're returning your payment excess and we agree that this brings an end to our contract/obligations/business relationship' all the best, ta-ra

Going legalese when you're not fluent lines you up for more hassle than it's worth

[JustinP1]

andy-xr said:

I think you're making more out of it than needs be, it needs to be a simple 'we're returning your payment excess and we agree that this brings an end to our contract/obligations/business relationship' all the best, ta-ra

Going legalese when you're not fluent lines you up for more hassle than it's worth

But, the OP doesn't want to just return the monies, he wants to have a 'clean break'.

Simply saying 'bye' doesn't do that. Hence, he's trying to use this opportunity to do so, in plain business language.

[Ultraviolet]

All thanks for your help... I've made some amendments to the wording, really trying to "tone it down" a bit whilst still ensuring we've covered all the angles..

I'll also get a legal review before progressing... but any thoughts on the amended version below would be much appreciated in the meantime:

---

Hi XXXX,

Thanks for the note. I am pleased that we seem to be on the way to reaching a conclusion – I appreciate you for your help so far.

I’ve spent some time looking into this - unfortunately you were right to state that this has caused us inconvenience… we are currently working with our accountants to rectify the issues arising from this error and finalising the associated costs.

Thanks also for your confirmation that there are no more invoices awaiting processing on your system. We have also conducted a reconciliation and found that the total discrepancy matches the amount confirmed in your email below (which is reassuring).

However, you’d forgive me in wanting to ensure that there won’t be any further complications. I’d therefore like to propose something slightly different, which will enable us to conclude things.

Therefore, and with reference to the various agreements that were entered into by our companies to provide services to the client (XXXXX), we would like to offer payment of the amount owed (£XXXXX) plus £XX* (feel free to think of this as a goodwill payment in consideration of your own admin costs) in full and final settlement in respect of the monies owed - and any other matters arising – as a consequence of our work together.

I trust this is OK with you. If you could please confirm your agreement to the above within 10 working days of this email we will then process with the payment of £XXXX accordingly.

I look forward to hearing from you.

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• I'm thinking a token amount here, say £20... to quote Richie Rich, "I'm not the Aga Khan you know".. does that matter? Can any amount be used as consideration or does it need to be proportionate in some way?

Cheers,

UV

[sgrimshaw]

My immediate reaction in receiving that would be that it sounds like you are trying to waive any future responsibilities or obligations that may have been stated or implied in the initial contract.

This is extremely vague : "..... in full and final settlement in respect of the monies owed - and any other matters arising – as a consequence of our work together "

From the last but one sentance it suggests that if they don't agree then you won't process the amound owed to them as a result of their overpayment.

It's also very informal. It's usually best to keep to a more formal format. Eg "Dear xxxx" was much better than ""Hi xxxx"

[drdel]

In my experience too many words cause confusion why not keep to the point.

"Please find our cheque in the amount of £???? in full and final settlement"

[Johnniem]

Will your proposed email actually cover the matter of not wanting to do business with them again? I don't this it does at the moment. Stating 'full and final settlement', in the context of the problem you are facing, relates only to the fact of the overpayment and not to the fact that you no longer wish to do business shirley?