Legality of agreement - dispute
Discussion
Hi
Agreed to defer some of my fees until October on a project to help out a venture that I felt could go somewhere, now thinking it won't but either way my deferred fees are due. It was a simple arrangement the only contract being through email specifying day rate, requirements, length of contract etc. This was agreed to, invoices have been submitted and paid and all documents retained as always.
Not talking a massive amount but still cash nevertheless. The reason we used October is that the customer stated they were set to receive further funding in October, hence the date used for deferred payment.
Here was my proposal to them:
I bill at 33% of my normal day rate but bill a further 33% of all time accrued in October when you secure your next round of funding.
I've subsequently invoiced for this amount to have this reply:
I did receive it and will deal with it as we originally agreed that it would be deferred until I raise some more funds.
My understanding was that it was deferred until October. Whether or not they secured funding was to me irrelevant at the time but in hindsight I should have dropped 'when you secure your next round of funding'. I think I included it because during conversations they always refereed to October as the point they received further funding.
They have a match fund agreed with VC for a decent amount, they are just looking to secure the other half in order for it to be issued so all not lost if worst case scenario just feel a litte pissed off at his reply.
What's the PH consensus?
Agreed to defer some of my fees until October on a project to help out a venture that I felt could go somewhere, now thinking it won't but either way my deferred fees are due. It was a simple arrangement the only contract being through email specifying day rate, requirements, length of contract etc. This was agreed to, invoices have been submitted and paid and all documents retained as always.
Not talking a massive amount but still cash nevertheless. The reason we used October is that the customer stated they were set to receive further funding in October, hence the date used for deferred payment.
Here was my proposal to them:
I bill at 33% of my normal day rate but bill a further 33% of all time accrued in October when you secure your next round of funding.
I've subsequently invoiced for this amount to have this reply:
I did receive it and will deal with it as we originally agreed that it would be deferred until I raise some more funds.
My understanding was that it was deferred until October. Whether or not they secured funding was to me irrelevant at the time but in hindsight I should have dropped 'when you secure your next round of funding'. I think I included it because during conversations they always refereed to October as the point they received further funding.
They have a match fund agreed with VC for a decent amount, they are just looking to secure the other half in order for it to be issued so all not lost if worst case scenario just feel a litte pissed off at his reply.
What's the PH consensus?
CaptainSlow said:
"I bill at 33% of my normal day rate but bill a further 33% of all time accrued in October when you secure your next round of funding."
seems pretty clear to me.
Fair enough.seems pretty clear to me.
If I tell a supplier that I will pay them when my customer pays me, but my customer doesn't pay me, should my supplier write off the debt I owe them? I think they would pursue me for the debt regardless?
jonamv8 said:
CaptainSlow said:
"I bill at 33% of my normal day rate but bill a further 33% of all time accrued in October when you secure your next round of funding."
seems pretty clear to me.
Fair enough.seems pretty clear to me.
If I tell a supplier that I will pay them when my customer pays me, but my customer doesn't pay me, should my supplier write off the debt I owe them? I think they would pursue me for the debt regardless?
jonamv8 said:
Fair enough.
If I tell a supplier that I will pay them when my customer pays me, but my customer doesn't pay me, should my supplier write off the debt I owe them? I think they would pursue me for the debt regardless?
If this is a contractual term they wouldn't be able to successfully pursue. I have a sales contract that has this exact back to back payment term, I can't recognise the sale in my books until payment is received.If I tell a supplier that I will pay them when my customer pays me, but my customer doesn't pay me, should my supplier write off the debt I owe them? I think they would pursue me for the debt regardless?
steve2 said:
jonamv8 said:
CaptainSlow said:
"I bill at 33% of my normal day rate but bill a further 33% of all time accrued in October when you secure your next round of funding."
seems pretty clear to me.
Fair enough.seems pretty clear to me.
If I tell a supplier that I will pay them when my customer pays me, but my customer doesn't pay me, should my supplier write off the debt I owe them? I think they would pursue me for the debt regardless?
But...
I have told quite a few suppliers via email that they will be paid in MONTH when customer pays me. Although I always pay regardless of recovering my debt from my customer as I keep my suppliers sweet.
CaptainSlow said:
jonamv8 said:
Fair enough.
If I tell a supplier that I will pay them when my customer pays me, but my customer doesn't pay me, should my supplier write off the debt I owe them? I think they would pursue me for the debt regardless?
If this is a contractual term they wouldn't be able to successfully pursue. I have a sales contract that has this exact back to back payment term, I can't recognise the sale in my books until payment is received.If I tell a supplier that I will pay them when my customer pays me, but my customer doesn't pay me, should my supplier write off the debt I owe them? I think they would pursue me for the debt regardless?
I suppose that due to the fact I put it in my email and they agreed to it that it's a contractual term?
This was a different type of arrangement to my bread and butter stuff so a possible oversight on my part and lesson learnt. I was looking for a get out clause and this could be it, the amount is small and to be fair my fees have been covered already this was pure profit for doing nothing really, no outlay needs recovering on my part! I'd just rather get my hands on the money if I can.
Not sure how to follow up, I think he knows in his head that we agreed to defer until October and now has changed his stance having reviewed the email due to cashflow issues.
Chrisgr31 said:
What's happened to the other 34% of your fee? If you have waived it cant they use it as part of their match funding target?
Possibly but we are not talking tens of thousands and they are looking to raise 100k.Funnily enough had correspondance from said organisation asking for a meeting to present a new role as part of a new business strategy.... Given the issue at the beginning of the thread i'm reluctant to say the least... Im busy with good few paying clients on interesting projects at the moment
jonamv8 said:
'I bill at 33% of my normal day rate but bill a further 33% of all time accrued in October when you secure your next round of funding.'
I've subsequently invoiced for this amount to have this reply:
'I did receive it and will deal with it as we originally agreed that it would be deferred until I raise some more funds.'
My understanding was that it was deferred until October. Whether or not they secured funding was to me irrelevant at the time but in hindsight I should have dropped 'when you secure your next round of funding'. I think I included it because during conversations they always refereed to October as the point they received further funding.
Yes. The second 33% is dependent on two things - October AND the next round of funding. Only one of those happened. The payment appears to be conditional on funding, so I'm afraid I agree with the client - and you will have to wait. And if they never get any more funds, that's probably curtains, unless they feel generous. Assumption/optimism unfortunately! ('it's not an order until the money's in the bank' etc).I've subsequently invoiced for this amount to have this reply:
'I did receive it and will deal with it as we originally agreed that it would be deferred until I raise some more funds.'
My understanding was that it was deferred until October. Whether or not they secured funding was to me irrelevant at the time but in hindsight I should have dropped 'when you secure your next round of funding'. I think I included it because during conversations they always refereed to October as the point they received further funding.
CaptainSlow said:
It's badly written so a little unclear, however I read it that it is dependent on funding being received.
Shame you didn't put a "," after the word "October".
Shame there was the bit about "when you secure funding" at all! I would chalk this up to experience unfortunately. No chance you're going to get an easy legal win based on a badly worded email. So the only chance you have of getting your money is their goodwill. If they choose to dig their heels in I imagine it's going to cost you more in legal fees than what you'd recover - if you can recover from a startup that obviously has no funds anyway.Shame you didn't put a "," after the word "October".
jonamv8 said:
Possibly but we are not talking tens of thousands and they are looking to raise 100k.
Funnily enough had correspondance from said organisation asking for a meeting to present a new role as part of a new business strategy.... Given the issue at the beginning of the thread i'm reluctant to say the least... Im busy with good few paying clients on interesting projects at the moment
I'd say your best bet is to use this new tangent of conversation to negotiate a better, more concrete (ie. proper contract) deal, which includes this 33% you're owed.Funnily enough had correspondance from said organisation asking for a meeting to present a new role as part of a new business strategy.... Given the issue at the beginning of the thread i'm reluctant to say the least... Im busy with good few paying clients on interesting projects at the moment
By phone I was told in July that the October funding was pre-secured and 100% guaranteed to happen. I may even have that in writing in an email somewhere. If I ever doubted the likelihood of that funding I'd have never mentioned it but I can chalk it up to experience. I just feel a little cheated and think they are being a bit cheeky trying to get me back in under the circumstances
Oh I agree, morally I think they're completely in the wrong; you've provided a service, you should be paid for the service. However morals and business don't always go hand in hand.
As I say, I'd be looking to use this new line of conversation about a new role for you to your advantage as much as legally possible.
As I say, I'd be looking to use this new line of conversation about a new role for you to your advantage as much as legally possible.
jonamv8 said:
By phone I was told in July that the October funding was pre-secured and 100% guaranteed to happen.
In hindsight of course that was to encourage you to work for less up front, being the helpful decent chap you are. I've seen it countless times... 'If you can just do one for free there'll be more work' and 'I can't pay you because the client hasn't paid me'. Invariably b
ks.jonamv8 said:
Possibly but we are not talking tens of thousands and they are looking to raise 100k.
Funnily enough had correspondance from said organisation asking for a meeting to present a new role as part of a new business strategy.... Given the issue at the beginning of the thread i'm reluctant to say the least... Im busy with good few paying clients on interesting projects at the moment
I would say:Funnily enough had correspondance from said organisation asking for a meeting to present a new role as part of a new business strategy.... Given the issue at the beginning of the thread i'm reluctant to say the least... Im busy with good few paying clients on interesting projects at the moment
be delighted to assist them and meet but should be grateful if the outstanding balance on their account is paid first.
love n kisses etc.
superlightr said:
jonamv8 said:
Possibly but we are not talking tens of thousands and they are looking to raise 100k.
Funnily enough had correspondance from said organisation asking for a meeting to present a new role as part of a new business strategy.... Given the issue at the beginning of the thread i'm reluctant to say the least... Im busy with good few paying clients on interesting projects at the moment
I would say:Funnily enough had correspondance from said organisation asking for a meeting to present a new role as part of a new business strategy.... Given the issue at the beginning of the thread i'm reluctant to say the least... Im busy with good few paying clients on interesting projects at the moment
be delighted to assist them and meet but should be grateful if the outstanding balance on their account is paid first.
love n kisses etc.
Simpo Two said:
jonamv8 said:
By phone I was told in July that the October funding was pre-secured and 100% guaranteed to happen.
In hindsight of course that was to encourage you to work for less up front, being the helpful decent chap you are. I've seen it countless times... 'If you can just do one for free there'll be more work' and 'I can't pay you because the client hasn't paid me'. Invariably bks.I met with the VC's who put in first phase of funding, not small and a well known decent VC and it was mentioned early on about second round in October so had little reason to doubt.
Something has changed in the background that's being withheld from me I think and the CEO doesn't want to enter into his piggy bank to pay my bill, but would love me to come back and work for me given the good job we did
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