Aug 08, 2008 03:28PM GMT
Question
•
Money - Other
I am self employed and having trouble collecting payment.?
I feel that I am probably going to have to take legal action. Any thoughts? Like maybe the SBA or something? I have a signed contract but they're kind of using it like a menu, after the fact.Let me explain a little further:
I was contracted to do a magazine for a local Chamber of Commerce. They signed my contract (which I believe is solid although I did generate it myself). About half way through the timeline they felt that they hadn't seen anything tangible and expressed that they would hold further payment until they had something more to look at. (I was frustrated but figured I understood their position although much of what had been in process was gathering photo and editorial. Editorial had been sent to them for review and they had signed off on what had been presented with few changes. Additional editorial had not been commented on. Photos to accompany editorial are taken, for the most part, after the editorial is approved.) They told me to fire the writer I had sub-contracted and that they would provide the editorial. A timeline was set up. Although unrealistic I agreed to do my best to stick to it. They had requested to see proofs in a two week period which I was not able to keep up with as they constantly made changes and provided the editorial late themselves. (this is one of the gray areas that I am unsure of how much leeway I have.) After reviewing my "final" invoice they agreed to pay part of this and part of that but would send me ~$11,000. Although I felt the final payment would still be disputed I agreed to give them the final job for that amount. They said they would pay the $11,000 at the end of their billing cycle which was about 10 days. I reluctantly agreed but felt that they had committed to at least that much and I could dispute the rest "later." When I received the check it was for $7,000. The balance of the dispute is with the sub-contractors I hired. My contract states that they are bound by the sub-contracts, which were included with my contract. They dispute the amount they have to pay for some of that work. I have no doubt about that the sub-contracts are fair and solid. They chose from my prices/contract
as if it was a menu, which might have been fine if it was negotiated prior to signing the contract and prior to me completing the job for them.
So that's my "case," now I want to present a letter with a final amount I feel they owe me. I do not want to go back and forth with them, much if at all! I feel like I've been there, done that, and they lied to my face. I want to have someone with some legal experience help me draft my final letter to be sure I am being perfectly reasonable. Or advise me as what my best course of action should be.
Loading...-
raves +1 posted Sep 30, 2008 05:36PM GMT (edited)
Answered This works...
If you have a signed contract the first thing that you need to do is send a letter of "Demand for Payment" referencing your signed agreement. I was independent too and had the same problem. I don't know what state you're in but my guess is the $4000 they owe you will fall under the minimum for small claims court. I would also reference that you will be taking action to file with the court if you do not receive payment in full by xx/xx/2008 (usually 30-45 days.) If they deny the demand...small claims court is no big deal - you don't need an attorney, just your documents and memory - and certainly worth collecting $4000. This was legal advice given to me during my dispute. After sending this letter I received payment before my stated due date despite numerous failed attempts for over a year prior.
However, with all that said, you may have already resolved your situation by now. =) -
raves +1 posted Aug 09, 2008 09:57PM GMT (edited)
Answered You're screwed!
You had an excellent case... until you said, "I agreed".... that takes your "contract" and makes it worth toilet paper in many instances.
However, with regard to the sub-contractor, you indicate that the balance owed ($4,000) has to do with funds relating to the sub-contractors work... Now, I do not know what state you are in, and while you are talking about "contractual law"... in which there are givens.... here is my take on the sub-contractor issue.
If they did not submit these changes to you in writing (as they should have been) and you signed nothing to the contrary of your original contact... they may still have to pay the full amount... All changes to any original contract should have "Change Orders" signed off on by all parties. Because you work is actually intangible until the client receives it, you have ownership and property rights that may come into play.... I would need to see the contract, and even then... there are many other things to consider.
It is a wise man who will pay a contract attorney to draw up the contract. Now, you need to have an attorney look at yours and tell you "IF" anything can be done...
I NEVER agree to anything outside my contract, and I adhere to everything in my contract. In my contract, payment in full is made on the first day of service. Never let people push you around. If your service is good and your price is fair... stand firm.
Best of luck... -
raves +1 Aug 10, 2008 02:51PM GMTThanks. I agree with your comments. I am 99% sure of my be able to collect on the sub-contracts and where they blatantly disregarded my contract. Then there's the gray area, but I if I don't receive full payment for that I can live with it, that's only about $1,100 dollars. Not worth struggling over that in the right or not, IMO.
(I work for a LIVING not just money :) -
raves +1 posted Aug 08, 2008 07:55PM GMT
Answered You're screwed!
I dont know what to tell ya with that one.Collections or sueing sound like the only options if you can't deal with them directly.Being a contractor,all I've had to deal with is slow pays.Never had anyone try and lowball me after the fact.The most I've had to do is threaten to put a lien on the property and the check shows up days later. -
raves +2 posted Aug 08, 2008 07:48PM GMT (edited)
Answered This might work...
I think Chilton's idea was great - hire a lawyer to write the letter ?
And do some legal research online - have you tried googling your problem and see how other people successfully handled it?
also - maybe you should re-submit this question under law, so people interested/experienced there will see it -
raves +2 posted Aug 08, 2008 07:46PM GMT
Answered This might work...
You can go to an attorney that specializes in contracts and such....just for the information on how to handle it....some will give you free advice, but some might charge a fee....they may even suggest you have them send them a letter if the attorney feels you have been or are being wronged..again a fee, but usually not expensive...but, some SH on here will probably know this area well and respond -
raves +4 Aug 08, 2008 09:28PM GMTIn your line of work sign everything and make it so it isn't obvious and be removed easily. That gives you a start to claim ownership rights if they do not pay. Second if the bill is small take them to small claims court. If they still don't pay hire a lawyer and go after them for your property rights back, your work, and damages, with legal fees.
Lastly when a bill comes due get on it immediately with a dunning letter. It's easier to apologize if their is a check that crosses in the mail than to get a response later. -
raves +3 posted Aug 08, 2008 05:49PM GMT (edited)
Answered This might work...
My suggestion would be the same as Dr T's, and Sister Jean"s! My husband owns a small business, and has the same problems at times. He just refers them to a bill collection agency, or calls them and speaks to them nice and firmly! He has also been a sucker, just like you, for friends, and they have let him down! I will ask my husband if there is free legal advice for small business owner's, and get back to you! -
raves +3 Aug 08, 2008 06:09PM GMT (edited)it is a sad fact, that you just can't be too nice in a business. Don't take it all personally! Even if you send the debt to collection agency, and don't get all the money back, just stop doing business with them. They might then pay their old bill, just to do more business with you. My husband says, that there is a Mayor in a small local town, who wrote him a hot check, and never paid on it. So he just keeps the returned check, and the Mayor still comes to the store and pays cash for anything he wants. That way, my husband is still making money off him!
-
raves +2 posted Aug 08, 2008 05:43PM GMT
Answered This works...
I don't know what you do for work, but where I work we require our client to pay us a retainer, we charge them fees if the go beyond the contracted scope of work, and they do not get the finished product until they give us a check. Perhaps you should start doing the same.
Other than that I have no good advice. Good luck! -
raves +3 posted Aug 08, 2008 05:37PM GMT
Answered This might work...
I have not owned a business so I really don't know...sure wish I could help.
Can you call their place of employment and leave a message about them settling their unpaid bill? Most people would not like that....lol...
Small claims court or have an attorney write a letter to them that you plan to pursue it legally. Good luck with this. -
raves +2 Aug 08, 2008 05:36PM GMTI did. My downfall was trusting them when they said they would pay it on their regular billing cycle. I am such a sucker! We even had a conversation about the fact that they didn't appreciate me holding them hostage. I told them I was sure they could understand my position. Stupid, stupid, stupid!
-
raves +3 Aug 08, 2008 05:44PM GMTBilling cycle? Is this another business? Could the Better Business Bureau receive a complaint? I know it usually goes the other way but...
If they feel you are holding them hostage.......you could always take out a personal add appealing to them for payment.......... -
raves +2
Answered This works...
I hired someone to handle the billing, which works wonders for me now; However, before I did that, my husband (my then fiancé), pulled rank military style on them for me. Of course, he was professional and tactful, but he has a way with making a strong point in one sentence or less. In one conversation with these clients, he got them to pay in full.
But, even though I have an employee handle the billing and collecting for me now, I've changed my policies: Now, I provide them with a high end/low end estimate, and charge a 50% deposit of the high end figure before work even begins. They are paying for my time, as much as they're paying for my skill. Once work is completed, I show them the completed project on a special directory on my own server for their approval. I make...
I hired someone to handle the billing, which works wonders for me now; However, before I did that, my husband (my then fiancé), pulled rank military style on them for me. Of course, he was professional and tactful, but he has a way with making a strong point in one sentence or less. In one conversation with these clients, he got them to pay in full.
But, even though I have an employee handle the billing and collecting for me now, I've changed my policies: Now, I provide them with a high end/low end estimate, and charge a 50% deposit of the high end figure before work even begins. They are paying for my time, as much as they're paying for my skill. Once work is completed, I show them the completed project on a special directory on my own server for their approval. I make sure I have them on the phone with me when they view it. Once they approve of the finished on-page product, I change permissions so they can't copy the source code. That's when the final invoice is sent. Once paid, all files are uploaded onto their server.
Before work begins, they agree to my terms, and my contracts stipulate that all work belongs to me until fully paid. Then all rights are released.