I need some advice on the legals of working with clients in UK

[trevwhite]

Hi

I do electronics and software development work in the uk. When quoting work I try to do my best to give clients a realistic price( in my opinion ) but never state the cost is fixed and I try to form a good relationship with my clients. I find that often if the relationship is good then most problems can be sorted out during a project. Some clients understand development has its ups and downs and things go well and work gets completed. Over the last year though I have had a couple of clients that have been a real problem and it has cost me big time.

Legally I do not really know where I stand and I do not know if I go to a solicitor if it will end up costing me a lot of money to get sorted out but I know I need to know my rights when dealing with clients and I need to protect myself from high maintenance clients.

One client tells me I entered into a contract with him despite not actually signing anything. We had discussed a project and I had quoted a price. We verbally discussed it and I had been approximate and casual that the project would cost about x amount. He sent over a purchase order for me to commence the work and slipped in some parts which I did not read. He stated on the PO that the amount was fixed for the project and that I would pay for all materials. I had assumed the PO was confirmation of our discussion and had not expected him to have slipped in some small print. I also did not expect him to turn around and state that I would have to complete all the work, hand over all the documentation and IP and await validation by a third party before any payment would be made. This is such a high risk for me and the amount of work and time to complete the project without payment is just unrealistic. I certainly feel I can not hand over all IP without some payment first. I have already done quite a bit of work on the project and will lose out if I just walk away from it.

Anyway I need to know where I stand in such cases and maybe draw up my own proper terms and conditions to protect myself from getting into such situations. What is the best way to go about this? If I have not signed any contract does an actual contract still exist between myself and a client? He currently has a demo unit of my work and still states that he will not pay even a partial amount until everything is handed over. He will not hand back the demo unit. There is valuable IP in the demo unit and I want it back. I have stated the IP is still mine whilst he has made no payment.

I really could do with some help

Thanks

Trev

[bookaboo]

For the client in question I'd strongly suggest getting proper legal advice, it's up to you whether the project is worth continuing with but sounds like the client is an unreasonable type and/or takes you for a fool. I'd play hard and drop the client as they sound like trouble.

For all projects I always quote in stages, each stage being a something like initial prototype, function A working, function B working, Pre-production model etc.
Any caveats in the pricing should be clearly stated, the key caveat being that a change in spec means a change in price. This is useful because no project ever goes without a spec change so if you are running over on your hours you can put it down to the spec change
Each stage has an agreed % of cost associated and when I show that stage is complete I expect to see payment. Payment for each stage is in advance unless it's one of a few client's I deal with regularly.

If a customer complains at having to pay upfront for a % then drop them, they either don't trust you, don't trust their own project or are untrustworthy themselves. Pass on their business.

[IanB]

Wow, what a mess 

If you quoted for some work, and the client sent you a PO, and you indicated acceptance of that PO by commencing work, then...I am not a lawyer, but how can you think you did not enter into a contract?

Really, you need to engage a solicitor and get legal advice. Yes, it will cost you, but otherwise I don't see how you can proceed.

More importantly, hire a lawyer before entering into any future arrangements. Make sure every job is based on a written contract, and make sure your lawyer reviews the contract before you sign it. A written contract agreed and signed by both sides is absolutely vital to any business arrangement. The contract must spell out all important details including the scope of work, what is to be paid and when, who owns what, what the arbitration arrangements are in the event of a disagreement, and many other things that a lawyer will advise you about. Don't start any work until the contract is in place.

[G7PSK]

As you are UK you could go to your local CAB or go to a solicitor most do the first half hour for free. Personally I would walk away from any client  that tried to treat me that way and cut my losses as he will only try and screw you more further down the line.   

[amiq]

Ian Dury wrote a song that started "arseholes, bastards fucking cunts and pricks".

It's best to assume all new customers are all of the above until proven otherwise.  In the UK a verbal contract is binding, but if your customer has added things to the PO that you haven't discussed and agreed to you should tell him to stick it up his arse.

How much do you estimate you'll loose if you walk away?   If it's a few £k learn the lesson and walk.

[Deathwish]

The guy sounds like a sociopath, walk away

[KJDS]

Herein follows a few basics of contract law. It should be noted that I am not a lawyer.

A contract is formed between two or more parties when some stages have been through. Those stages are, offer, acceptance and consideration. You sent a quote, which is probably considered and invitation to treat, they sent back a purchase order, with terms and conditions which can legally be considered an offer and you started work which is acceptance. As I am sure that the purchase order mentions sums of money then that is the consideration covered. A contract therefore exists. Unless you challenged their terms and conditions at the time of receipt, and they would have to have been included with the purchase order, then you're working to those terms and conditions. Small print is often unenforceable in UK law, but only when you are a consumer dealing with a business which is not the case here.

I rather suspect you need a decent contract lawyer to look through those terms and conditions to see what the real implications of those are. Not all conditions in a contract are enforceable, however in a contract between businesses then the scope of the unfair contract terms act is somewhat limited.

You probably need to find a decent contract lawyer, many will give an initial 30 mins or so for free, ask your accountant or other contacts to see if they can recommend one. Do not walk away, otherwise the customer could be entitled to ask someone else to finish the job at any reasonable rate, and there are many consultancy companies who can prove that their reasonable rate is several hundred an hour, and you could be liable for that.

[Macbeth]

If he is going to be an arsehole then take him to an employment tribunal and claim you are not in business on your own account and are in fact a de-facto disguised employee of this cunt. There is a massive bias in the system that we are all down-trodden employees. The great thing about this is that the HMRC will be trying their best to lump IR35 on you and tax you as if you were an employee & a business (to get 2 lots of tax). But if an employment tribunal claims you are actually in business on your own account then this will be a great piece of paper to wave in HMRC's face when they try to take their pound of flesh in the future for new contracts . If the tribunal rules the other way and deems you an actual employee then in law the HMRC have to go after the twat for taxes, etc. You will get your invoiced dosh net of tax as wages from him.

I would normally not advise to do what is called "the nuclear option" but sometimes tactics call for it.

Either way, you can't trust this chump and should down tools.

[Macbeth]

Oh, one guy that always had excellent legal advice back in my contracting days was Roger Sinclair, he used to write for Freelance Informer (if that still exists?) as egos.

http://www.egos.co.uk/

Try an email to him first?

[TopLoser]

Turn around and walk. Fast, and don't look back. They will be left in a bigger hole than you.

[KJDS]

This group

https://www.ipse.co.uk/

May be able to assist you.

[trevwhite]

Thanks for all the replies. I think I really should have walked away a long time ago. Its an expensive lesson and I am not sure if its over yet judging by some comments here. I suppose I will have to see what he comes back with but I will not be doing any more work for him on the current project or any future project he might have. It is a shame because the work I did was bloody good stuff!

I think the main goal is that I need proper Terms and Conditions drafted up for all future work.

[Spikee]

Turn around and walk. Fast, and don't look back. They will be left in a bigger hole than you.

+1

Especially if you are abroad they can't do much without spending a significant amount of money and time. Which will most likely be more than the contract.

Had a client with bad intentions from the USA. Went way above what was needed to try to fix the issues but in the end it did not work out.

I ended cancelling the contract and I'm glad I did it. Later I found out that the client had done similar things to contractors after me and they all ended up in bad experiences.

From this experience I'm very weary of US clients and trend to not take jobs from this country.
---

As for the "Supposed contract" you have entered. Even with signatures this is really hard to prove in court (if it comes so far).
Without a bunch of unbiased witnesses etc...

For future jobs I would advice you to make some sort of terms of service. The one of UpWork is pretty good for contracting / freelance work.

But you could write your own with the help of a lawyer.

[Not a lawyer]

Edit:
If you haven't been paid than it is even easier to walk away.

[Zero999]

Do not walk away, otherwise the customer could be entitled to ask someone else to finish the job at any reasonable rate, and there are many consultancy companies who can prove that their reasonable rate is several hundred an hour, and you could be liable for that.

Yes, there's a risk he could deem you to be in breach of contract as you haven't abided by the terms and conditions on the PO (however unfair or unrealistic they might've been) but he'd have to take you to court of course. However if he hasn't paid you anything then I doubt he'd get very far.

[TopLoser]

Do not walk away, otherwise the customer could be entitled to ask someone else to finish the job at any reasonable rate, and there are many consultancy companies who can prove that their reasonable rate is several hundred an hour, and you could be liable for that.

Yes, there's a risk he could deem you to be in breach of contract as you haven't abided by the terms and conditions on the PO (however unfair or unrealistic they might've been) but he'd have to take you to court of course. However if he hasn't paid you anything then I doubt he'd get very far.

I rather doubt that a company that hasn't paid a penny to a contractor since the start of a project will commit to throwing a potentially unlimited amount of money at lawyers who most certainly won't proceed without payment...

[TopLoser]

http://youtu.be/kn481KcjvMo

[mikeselectricstuff]

I've been doing consultancy stuff for 25+years and never had anything like a full written contract. A lot of work would be impossible or uneconomic if you went into paperwork for all  potential paperwork and started pissing money into lawyers' pockets.
Choosing customers is important, as is not taking on something unless you're certain you can do it.
For a new customer I usually send, along with my interpretation of the spec,  some brief outline terms which include that I reserve the right to withhold IP and/or assistance (e.g. with manufacturing) until any outstanding invoices are paid, and that any work to resolve issues after the customer has tested and accepted it may be chargeable.

[mikeselectricstuff]

Do not walk away, otherwise the customer could be entitled to ask someone else to finish the job at any reasonable rate, and there are many consultancy companies who can prove that their reasonable rate is several hundred an hour, and you could be liable for that.

Yes, there's a risk he could deem you to be in breach of contract as you haven't abided by the terms and conditions on the PO (however unfair or unrealistic they might've been) but he'd have to take you to court of course. However if he hasn't paid you anything then I doubt he'd get very far.

I rather doubt that a company that hasn't paid a penny to a contractor since the start of a project will commit to throwing a potentially unlimited amount of money at lawyers who most certainly won't proceed without payment...

IANAL but I believe a contract requires offer, acceptance and consideration - if nothing has been paid, no contract exists.

[Howardlong]

The great thing about this is that the HMRC will be trying their best to lump IR35 on you and tax you as if you were an employee & a business (to get 2 lots of tax). But if an employment tribunal claims you are actually in business on your own account then this will be a great piece of paper to wave in HMRC's face when they try to take their pound of flesh in the future for new contracts . If the tribunal rules the other way and deems you an actual employee then in law the HMRC have to go after the twat for taxes, etc.

Regrettably, the flaw here is that in the UK, employment law != tax law.

While one may help as a subjective pointer to the other when it comes to employment status and/or tax liability, on their own they don't back each other up without plenty of other supporting evidence. So you're screwed either way.

I'd not recommend going this way, the last thing anyone wants is to encourage a visit from HMRC by sounding alarm bells, they'll be round you like flies round a turd. Squeaky clean or not, it's not an exercise to look forward to.

[Spikee]

Choosing customers is important, as is not taking on something unless you're certain you can do it.

The second part is really important. But also vetting your clients is a big thing you must be aware of.

Took a shady job once and I learned my lesson ...
Was protected by contract and the freelancing agency so nothing bad financially happened to me.
but getting stressed for those days is not worth the few thousand dollars.

When there is a certain part I'm not that experienced at I will tell the client upfront. Worst case scenario I would have to hire somebody external for a few hours to help with that particular part.

Talking to the client via skype (preferred) comes a long way into vetting him / her.

Other than the general agency T.O.S. and the occasional extra NDA I don't use other contracts. Also carefully reading contracts / purchase orders / terms of service are important.
anyway...
---
Have you talked to the client about the issue? or is there already Hostility between you two ?

Edit:

When there is a certain part I'm not that experienced at I will tell the client upfront. Worst case scenario I would have to hire somebody external for a few hours to help with that particular part.

Or spending a little time researching or tinkering before committing

Indeed

[mikeselectricstuff]

When there is a certain part I'm not that experienced at I will tell the client upfront. Worst case scenario I would have to hire somebody external for a few hours to help with that particular part.

Or spending a little time researching or tinkering before committing

[TopLoser]

Fuck me Trev, I can't believe that after all the endless questions and ifs and buts and hoops you've had me jump through before buying £100 bits of kit from me you've got yourself in a mess like this?

Please don't throw good money after bad at lawyers and solicitors.

[KJDS]

Do not walk away, otherwise the customer could be entitled to ask someone else to finish the job at any reasonable rate, and there are many consultancy companies who can prove that their reasonable rate is several hundred an hour, and you could be liable for that.

Yes, there's a risk he could deem you to be in breach of contract as you haven't abided by the terms and conditions on the PO (however unfair or unrealistic they might've been) but he'd have to take you to court of course. However if he hasn't paid you anything then I doubt he'd get very far.

I rather doubt that a company that hasn't paid a penny to a contractor since the start of a project will commit to throwing a potentially unlimited amount of money at lawyers who most certainly won't proceed without payment...

IANAL but I believe a contract requires offer, acceptance and consideration - if nothing has been paid, no contract exists.

IANAL, however as far as I understand it, if the offer and acceptance detail how much is to be paid, then that is the consideration. The payment date not being reached does not mean that the contract doesn't exist.

[sleemanj]

Sounds to me like you will never get paid even if you did give them everything.  Cheque would be forever in the mail.

Time to cut your losses.

[Dave Turner]

If I remember correctly contract law in Scotland is/was different to the rest of the UK. Under some circumstances a shake of the hand could be considered binding.

[Macbeth]

Fuck me Trev, I can't believe that after all the endless questions and ifs and buts and hoops you've had me jump through before buying £100 bits of kit from me you've got yourself in a mess like this?

Please don't throw good money after bad at lawyers and solicitors.

Genuinely PMSL 

[lewis]

Did you accept the order?

Issuing a purchase order does not constitute a contract. I could issue a PO to Farnell for £1million worth of stuff and tell them I'll pay them in 20 years time, but they are under no obligation to accept it ('receiving' it is not accepting it). Acceptance of the order in the form of a written* order confirmation would form the contract. No confirmation, no contract. If the order confirmation was in the form of a pro-forma invoice, the contract would be formed on payment of the invoice, since payment up front is now an implied term of contract.

Unless you open a credit account with a supplier, or there is a specific agreement to the contrary, it is usual to pay for goods and services up front. Try walking out of a supermarket with an offer to pay them later. In design or consultancy, it's usual to ask for a deposit up front and the remainder on delivery. The customer is being unreasonable (in the legal sense of the word) in expecting otherwise.

The demo units you have produced are yours until he pays for them. Title of goods and services does not pass to a customer until they have paid for them (unless you have expressly stated in writing* that they can have them for free) whether there is a contract or not. This will be in your terms of business (see below). Giving someone samples of your work does not constitute acceptance of the purchase order and formation of a contract. (I ask an architect to design me a house and give him a PO. He shows me some other houses he's designed. Does he have to accept my order and my onerous terms?)

The other thing you can do is give them your most up-to-date copy of your terms of service. Clearly the customer has not requested (either verbally* or in writing) your full written terms of service, or they have not looked the link on your website. I am sure you have told your customer that terms and conditions of business are available on request, and that the terms on their PO contravene your terms of sale. Ensure they have a copy of your terms of business.

Get out of this and run a mile, and do not ever deal with this customer again.

* remember verbal contracts aren't worth the paper they're written on.

(I am not a lawyer, etc.)

[tggzzz]

IANAL but I believe a contract requires offer, acceptance and consideration - if nothing has been paid, no contract exists.

Correct: YANAL. Consider a contract which specifies payment on delivery - the contract exists before payment, by definition!

[bookaboo]

Are you in the UK yourself? If not there's a good chance any legal recourse by the UK company would be prohibitively expensive. Even across EU borders litigation is incredibly expensive and it's highly unlikely they will try to do anything about it.

Again i will caveat IANAL and you should seek professional advice.... which others have stated will usually be free for the first consultation.

[tggzzz]

Did you accept the order?

Issuing a purchase order does not constitute a contract.

(IANAL, but I have written quotes for consultancy companies, many years ago. Note the situation may be different in other territories, e.g. Scotland; the contract will say which territory)

Correct. However, starting work after the offer is accepted can indicate the formation of a contract. "Acceptance" could be a purchase order or a returned signed copy of the contract. If the latter it is prudent to check it hasn't been modified by the client, since that would constitute a counter-offer - and starting work could indicate the formation of a contract.

The examples with Farnell etc are not illuminating, since that is only one form of contract, and the details in the Ts&Cs are different to other contracts.

Unless you open a credit account with a supplier, or there is a specific agreement to the contrary, it is usual to pay for goods and services up front. Try walking out of a supermarket with an offer to pay them later. In design or consultancy, it's usual to ask for a deposit up front and the remainder on delivery. The customer is being unreasonable (in the legal sense of the word) in expecting otherwise.

True but irrelevant. All that matters are what is specified in this contract.

The demo units you have produced are yours until he pays for them. Title of goods and services does not pass to a customer until they have paid for them (unless you have expressly stated in writing* that they can have them for free) whether there is a contract or not. This will be in your terms of business (see below). Giving someone samples of your work does not constitute acceptance of the purchase order and formation of a contract. (I ask an architect to design me a house and give him a PO. He shows me some other houses he's designed. Does he have to accept my order and my onerous terms?)

Maybe, maybe not. As you say, it is specified in each individual contract's Ts&Cs.

The other thing you can do is give them your most up-to-date copy of your terms of service. Clearly the customer has not requested (either verbally* or in writing) your full written terms of service, or they have not looked the link on your website. I am sure you have told your customer that terms and conditions of business are available on request, and that the terms on their PO contravene your terms of sale. Ensure they have a copy of your terms of business.

But if the OP started work then that may or may not be relevant.

Get out of this and run a mile, and do not ever deal with this customer again.

Yup, and learn some contract law and how to write contracts! I still have a "contracts book" with many many clauses from which I selected those that are appropriate to the work being proposed.

You need some professional advice from a lawyer and a professional negotiator with brass balls. The latter will help you tough it out and deal with a bullying client.

[tszaboo]

I've been doing consultancy stuff for 25+years and never had anything like a full written contract. A lot of work would be impossible or uneconomic if you went into paperwork for all  potential paperwork and started pissing money into lawyers' pockets.
Choosing customers is important, as is not taking on something unless you're certain you can do it.
For a new customer I usually send, along with my interpretation of the spec,  some brief outline terms which include that I reserve the right to withhold IP and/or assistance (e.g. with manufacturing) until any outstanding invoices are paid, and that any work to resolve issues after the customer has tested and accepted it may be chargeable.

Actually, I would love to hear more about the business practices that people do when they do contracting. How do you do it?
Signing 10+ page contract scares the hell out of me, but also doing a work, just saying "hey, my rate is x" is also not working. Where is the middle ground?

[lewis]

Correct. However, starting work after the offer is accepted can indicate the formation of a contract.

How would the customer, or the courts, know the OP has started work? And what constitutes work?

The examples with Farnell etc are not illuminating, since that is only one form of contract, and the details in the Ts&Cs are different to other contracts.

I disagree, the point is that one party cannot by definition instigate a contract. Both parties must agree on terms. Only written acceptance of the PO would be agreement to those terms.

True but irrelevant. All that matters are what is specified in this contract.

In the absence of terms, or in disagreement over terms, the courts will look at what a 'reasonable person' could 'reasonably expect' based on common industry practise. It's 'not reasonable' and certainly unusual to expect the OP to perform the work as per the terms outlined in the PO (i.e. with no realistic possibility of payment).

Maybe, maybe not. As you say, it is specified in each individual contract's Ts&Cs.

I'm sure the OPs T&Cs have a 'retention of title' clause that entitles him to repossess goods for non-payment. (Unless they were given as free samples, with a written delivery note confirmation).

You need some professional advice from a lawyer and a professional negotiator with brass balls. The latter will help you tough it out and deal with a bullying client.

Absolutely this^^. Don't take legal advice from an internet forum (<<but do take this advice!).

Basically, they guy's having you on and taking the piss. And throwing words like 'contract' at you to get you to cave in and do a load of work for nothing. He needs to be told to fuck off.

[tggzzz]

Signing 10+ page contract scares the hell out of me, but also doing a work, just saying "hey, my rate is x" is also not working. Where is the middle ground?

It is no worse than buying health/travel insurance, where you ignore the benefits and start by reading the Ts&Cs; each T&C is there for a reason (to protect the insurance company). You read each clause and think "why is that there; what use-cases could cause it to be invoked".

I'd be more scared about starting with a poorly understood/worded contract, or with no contract at all.

[tggzzz]

Correct. However, starting work after the offer is accepted can indicate the formation of a contract.

How would the customer, or the courts, know the OP has started work? And what constitutes work?

If not agreed beforehand, the courts will decide.

... the point is that one party cannot by definition instigate a contract. Both parties must agree on terms. Only written acceptance of the PO would be agreement to those terms.

That's not my information, and that comes from contract lawyers. Starting work can be regarded as acceptance of the PO.

If your point was correct then it would lead to ridiculous infinite recursion, e.g. there would need to be written acceptance of the written acceptance of the PO - etc. That recursion has to be broken, and it can be broken by starting work after acceptance of the PO.

[lewis]

Starting work can be regarded as acceptance of the PO.

I agree with that, but to a point. Using my Farnell analogy, someone has to process the ridiculous PO I sent them, then someone has to toss it into the bin. Although time and money have been expended on it, I don't think you could argue Farnell has started 'work', and therefore accepted the draconian PO. Maybe Farnell got so far as packing the stuff up ready to be sent out, but realised they were being taken for a ride at the last minute. They've definitely done some 'work' to fulfil the order, but I'd never know. And without the written order confirmation I'd stand no chance in court.

In the OP's case, has he produced anything tangible for the client? Invoiced them? Given them a sample (after the PO)? Written order confirmation? It would be difficult for any prosecution to prove that work was started without a paper trail or anything tangible, whether in reality the OP started anything or not.

My point is this: Is there any paperwork that proves he accepted the order. If not, no agreement and therefore no contract.

If your point was correct then it would lead to ridiculous infinite recursion, e.g. there would need to be written acceptance of the written acceptance of the PO - etc. That recursion has to be broken, and it can be broken by starting work after acceptance of the PO.

No, once acceptance is given, the agreement exists. Party A makes an offer (PO), party B accepts (order confirmation or invoice), agreement begins. No recursion there. From the pdf linked below: "Once an offer has been accepted, the parties have an agreement. That is the basis for a contract, but is not sufficient in itself to create legal obligations."


Anyway, this is all moot, according to this no contract exists anyway: http://www.a4id.org/sites/default/files/user/documents/english-contract-law.pdf

It mentions:  "...a promise is not, as a general rule, binding as a contract unless it is supported by consideration... Consideration is "something of value" which is given for a promise and is required in order to make the promise enforceable as a contract."

So according to that, there is no contract unless he pays for the goods, (in which case the OP is under a contractual obligation to supply them) or the OP delivers the goods (in which case the customer is obliged to pay for them).

[tggzzz]

Starting work can be regarded as acceptance of the PO.

I agree with that, but to a point. Using my Farnell analogy, someone has to process the ridiculous PO I sent them, then someone has to toss it into the bin. Although time and money have been expended on it, I don't think you could argue Farnell has started 'work', and therefore accepted the draconian PO. Maybe Farnell got so far as packing the stuff up ready to be sent out, but realised they were being taken for a ride at the last minute. They've definitely done some 'work' to fulfil the order, but I'd never know. And without the written order confirmation I'd stand no chance in court.

In the OP's case, has he produced anything tangible for the client? Invoiced them? Given them a sample (after the PO)? Written order confirmation? It would be difficult for any prosecution to prove that work was started without a paper trail or anything tangible, whether in reality the OP started anything or not.

My point is this: Is there any paperwork that proves he accepted the order. If not, no agreement and therefore no contract.

If your point was correct then it would lead to ridiculous infinite recursion, e.g. there would need to be written acceptance of the written acceptance of the PO - etc. That recursion has to be broken, and it can be broken by starting work after acceptance of the PO.

No, once acceptance is given, the agreement exists. Party A makes an offer (PO), party B accepts (order confirmation or invoice), agreement begins. No recursion there. From the pdf linked below: "Once an offer has been accepted, the parties have an agreement. That is the basis for a contract, but is not sufficient in itself to create legal obligations."


Anyway, this is all moot, according to this no contract exists anyway: http://www.a4id.org/sites/default/files/user/documents/english-contract-law.pdf

It mentions:  "...a promise is not, as a general rule, binding as a contract unless it is supported by consideration... Consideration is "something of value" which is given for a promise and is required in order to make the promise enforceable as a contract."

So according to that, there is no contract unless he pays for the goods, (in which case the OP is under a contractual obligation to supply them) or the OP delivers the goods (in which case the customer is obliged to pay for them).

Consider a contract which states "I will give you X in 6 months time, and you will then give me Y", and work starts on the contract. If X is not forthcoming at the due date, then the client can sue for losses due to non-delivery. Note that nothing has changed hands.

[nctnico]

I've been doing consultancy stuff for 25+years and never had anything like a full written contract. A lot of work would be impossible or uneconomic if you went into paperwork for all  potential paperwork and started pissing money into lawyers' pockets.
Choosing customers is important, as is not taking on something unless you're certain you can do it.
For a new customer I usually send, along with my interpretation of the spec,  some brief outline terms which include that I reserve the right to withhold IP and/or assistance (e.g. with manufacturing) until any outstanding invoices are paid, and that any work to resolve issues after the customer has tested and accepted it may be chargeable.

Those outline terms are a contract!
I do the same BTW. I send my terms & conditions to new customers before starting on any work.

[lewis]

...then the client can sue for losses due to non-delivery.

Or can they?

I've got something on backorder with RS at the moment, they keep putting back the delivery date. Can I sue them?

[mikeselectricstuff]

...then the client can sue for losses due to non-delivery.

Or can they?

I've got something on backorder with RS at the moment, they keep putting back the delivery date. Can I sue them?

No because when purchasing you agreed to their terms, which I have no doubt exclude any liability for non-delivery

[tggzzz]

...then the client can sue for losses due to non-delivery.

Or can they?

I've got something on backorder with RS at the moment, they keep putting back the delivery date. Can I sue them?

Read the Ts&Cs - that's all that counts!

Surprise, surprise, section 4 in http://uk.rs-online.com/web/generalDisplay.html?id=aboutRS&file=conditions states "Times and dates for delivery quoted on the RS website or by RS's employees are approximate only and RS shall not be liable for the consequences of any delay in delivery. Time for delivery shall not be of the essence."

[HighVoltage]

What a mess!

A good friend just had the very same thing happened here in Germany. And when he waited to long to walk away, they threatened him to be sued. He finished the job and did NOT get paid because they found some small things not as agreed. He will be waiting for money until the cows come home and has no legal grounds to fight.

I see the same with you.
Get out as fast as you can, if it is still possible.

[lewis]

Read the Ts&Cs - that's all that counts!

Surprise, surprise, section 4 in http://uk.rs-online.com/web/generalDisplay.html?id=aboutRS&file=conditions states "Times and dates for delivery quoted on the RS website or by RS's employees are approximate only and RS shall not be liable for the consequences of any delay in delivery. Time for delivery shall not be of the essence."

Indeed! It's not possible to sue RS for delayed delivery because of this clause. I'm sure the OP has something similar in his terms, even if the client has not made the effort to read them or understand them fully.

[trevwhite]

Well it has certainly raised a bit of a discussion and I really appreciate the input. Thanks.

I am not sure how a project that is based on potential earnings i.e. development can lead to someone being sued. As the product does not already exist I am not sure it can be proven that the client has lost anything. They are not going to be able to prove the product would have made them any money. Its all based on potential?

What I found from dealing with the one particular client was that no matter how many discussions I had with him, a few days later or a week he ended up reverting back to his belief of the original contract. I also have lost faith that he has any cash waiting to pay the bill. Is it legal to raise credible concern for payment and generate a proforma for work instead even if originally I might have agreed to different payment terms? 

I had so many times told him we would not be able to move forward unless terms changed. I recommended he find a company with more resources available to handle his demands and the level of risk.

I verbally agreed an interim payment based on delivering the prototype he now has. When I delivered it he said there was nothing written down and that I was mistaken about the deliverables. No payment could be made without releasing all the IP and project file. That is when I told him no chance and that I would not be able to do anything else on the project until a payment was made. I stated that we had made an agreement and now he has backed out. But it was all verbal.

It irritates me that he has my prototype and can take it to another firm who can understand exactly what I have done. It was not an easy project and walking away whilst he has my work is painful. I will survive if I do not get any money from him and I will have to just put it down to an expensive lesson.

[TopLoser]

"Is it legal to raise credible concern for payment and generate a proforma for work instead even if originally I might have agreed to different payment terms?"

WTF Trev?? Aghast open mouth disbelief...

[trevwhite]

Well people are talking about contracts, etc and so I am just wondering when it comes to payment terms if they are contractual things or can be changed at any time..

[TopLoser]

Is there ANYTHING in writing?

[ez24]

To OP

How about posting the PO and especially the "fine print" so we can see what you are talking about

(if you are not already on the run)

[PlainName]

Indeed! It's not possible to sue RS for delayed delivery because of this clause.

For delayed delivery, but non-delivery is a bit different.

I recently bought some (damaged) white goods from a retailer, paid for them, and arranged for delivery. The day after, the retailer told me they would not be delivering the goods since they'd accidentally been sold to someone else before me(!). I sued them for breach of contract and demanded that they delivery the said goods at the agreed price, and they had to pay for brand new goods to be delivered from an alternative supplier (because they were too proud to go and buy the stuff themselves and not make such a big loss). The retailer, a major chain, threw their legal department at solving this (for them) and refused to budge right up until the day in court was booked.

With RS, if they've accepted your money they they must deliver the goods at some point. I guess that, with those T&C and lacking any other clause (such as, if it turns out they can't provide the stuff a refund will settle things), they could delay delivery indefinitely...

[PlainName]

It irritates me that he has my prototype and can take it to another firm who can understand exactly what I have done.

Wait... he hasn't paid you at all, and there is no written contract? Everything was verbal, and he's relying on that to not pay you?

He's stolen your prototype, and you should treat it as theft unless and until he pays for it. It is yours and there is no way he can prove otherwise. Tomorrow, you must write to him (don't phone or talk, you want this on record) and ask for the prototype back. Mention that it if is not returned intact by the end of the week you will treat it as being sold to him for £x. That is not agreeing to his PO, it is selling a single item to him. Remind him that the IP is entirely yours and he should not divulge it to any third party on penalty of legal action being taken against him for recovery of any loss caused by same.

Then next week (because he will ignore this or call your bluff), send him a letter before action for the £x you threatened to charge him, and state that if he doesn't cough within 2 weeks you will take action against him. Then, because he will ignore that, you toddle off to the Money Claim Online webby and sue him (this assumes the amount is within the small claims range).

Don't get into a conversation or argument with him about anything - if he wants to settle in some way they consider his proposal, but don't get into explaining or arguing or anything like that  because he will walk all over you. Arms length, strictly only as needed is what you want here.

Importantly, don't waver once you have started down this path, because he will call your bluff. You are in the right unless there is paperwork to say differently, and the worst case is you lose £40 should your claim fail. It has to be worth that just to put the shits up him

Edit: Goes without saying, other than what Lewis did above, but: I am not a lawyer, and you shouldn't take advice from an internet forum without checking it out first.

[trevwhite]

I do not want to release all the details because its quite public here. There was a small part payment made a long time ago for work that was delivered but it was not a lot of money and the project evolved into something a lot more complicated than originally thought by both parties.

It is a complete mess and its best I walk away from it because I can tell it will take up so much of my time dealing with it. It is cheaper for me to just lean the hard lesson and get my T&Cs in place properly. I was just curious about a pro forma really.

[TopLoser]

Hard lesson but good attitude. Move along don't look back and tomorrow is another day.

Don't waste any more words or time on this 'client'.

[PlainName]

Gotta agree with Ian - if you can walk away cleanly it's better to take the hit. My previous comment was on the assumption that it might not be possible to do that (because the bloke would hound you - one way to effectively deal with a persistent bully is a swift kick to the nuts  ).

[Galenbo]

... and maybe draw up my own proper terms and conditions to protect myself from getting into such situations.

You really should do this. It doesn't have to be complicated.
Just state the payment vs results vs effort conditions, and project exceptions, like what happens if someone wants more/different things.

[Pinkus]

I think the main goal is that I need proper Terms and Conditions drafted up for all future work.

One comment on this: Well, you do mention your Terms and Conditions when you send out your quote. But .... your customer will have some too. And usually they are ordering on their Terms and Conditions (this is what usually is noted somewhere in the small print). Legally, his order is an offer to you. You can still decide to accept or decline. If you now fulfil the order or send an order confirmation, your are accepting their Terms and Conditions automatically as they are connected to their offer (order).
Thus what you need is an order where your customers either is not mentioning that his Terms and Conditions are applied or an order, where he states that your Terms and Conditions are applied.
Good luck to get this note on an order from a larger company...

[tggzzz]

I think the main goal is that I need proper Terms and Conditions drafted up for all future work.

One comment on this: Well, you do mention your Terms and Conditions when you send out your quote. But .... your customer will have some too. And usually they are ordering on their Terms and Conditions (this is what usually is noted somewhere in the small print). Legally, his order is an offer to you. You can still decide to accept or decline. If you now fulfil the order or send an order confirmation, your are accepting their Terms and Conditions automatically as they are connected to their offer (order).
Thus what you need is an order where your customers either is not mentioning that his Terms and Conditions are applied or an order, where he states that your Terms and Conditions are applied.
Good luck to get this note on an order from a larger company...

The normal way to deal with that is to

• discuss what the client wants and how you might supply it
• write a proposal stating what the client supplies and when, what you supply and when, payment terms, IP rights, and generic Ts&Cs
• when the client accepts by returning a signed copy of the proposal, check every page to see they haven't made any changes that constitute a counter-porposal
• if it isn't a counter-proposal, then start work at the appropriate time

Of course, they may define their Ts&Cs - either explicitly using their standard clauses, or implicitly via a counter-offer. It is up to you to decide whether to accept them and proceed - or not.

[Galenbo]

...
Thus what you need is an order where your customers either is not mentioning that his Terms and Conditions are applied or an order, where he states that your Terms and Conditions are applied.
Good luck to get this note on an order from a larger company...

I wouldn't see it so polarised.

There are terms&conditions like security where you will have to behave like what the company says, but it's all in the details, your terms&conditions can determine how much they will pay extra if that security guy suddenly wants something completely different or extra.

Like "free access to the site", they determine how/when/badge/autorisation/exam/where/... you enter the site, you will not run over that, but you determine how much they will pay extra if you have to wait 1 hour a day because there are 4 lorries before you or because their badge system crashed again.

For some projects, we made 2 prices: 1 expensive with no facilities from them, and a much cheaper with a list of facilities, like locked-storage on site,...
To them to choose what. The price difference was genuine, because without facilities we worked much less efficient and some material was stolen.

[tggzzz]

For some projects, we made 2 prices: 1 expensive with no facilities from them, and a much cheaper with a list of facilities, like locked-storage on site,...
To them to choose what. The price difference was genuine, because without facilities we worked much less efficient and some material was stolen.

In my experience clients will put up with a heck of a lot, provided they know why and know in advance. I once wrote a quote to develop a hospital lung ventilator and copied a clause to the effect that we specifically stated it would not be suitable for life support applications. In the covering letter I drew attention to the clause, the client happily accepted it, and the project went nice and smoothly