A sticky contractor situation: no pay yet?

Subject: A sticky contractor situation: no pay yet?
From: "Hart, Geoff" <Geoff-H -at- MTL -dot- FERIC -dot- CA>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Mon, 14 Jul 2003 09:27:48 -0400


Chuck Martin reports: <<[The client wasn't] paying a great rate, but I
needed the money, and I could do the work: a User Guide for a web
application that was being written on the other coast. They wanted to sign
me up Net 30, but I said no, I'd do Net 15, and we changed the contract.>>

First off, if you've got a contract, this means the client is legally
obliged to pay based on the terms of the contract. If you specified an
interest rate for bills not paid on time, you can resubmit your invoice with
the interest charge tacked on--but read on before doing that. (I did
actually win this argument with a provincial government several years ago.
"We don't pay 1.5% per month." "You do now. That's what's specified in the
contract. Want to discuss this in small claims court?" "The check is in the
mail, sir.")

<<I turned in my first invoice 2 weeks ago; the 15th day is Monday. But last
week I was talking ever day with the owner, saying that I'd really
appreciate him cutting a check, and by mid-week, he was saying that a check
is in the mail and I should get it by the end of the week. I returned home
on Friday, no check. Not on Saturday either.>>

Don't anticipate a problem where one may not exist. If the check really was
"mailed" Wednesday, it may not have actually been dropped off at the post
office until Thursday. If your address was incomplete, it might take another
day or two to arrive. I actually had one recent cheque delayed by 2 weeks
because despite my new address being clearly labeled on all correspondence
with the client and their contract department, and typed clearly on their
contract, they somehow had my old address (10+ years old) on file and sent
the cheque there instead.

So the first step before getting out the firearms is to contact the client's
accounts payable department and inquire gently about the status of the
cheque, and while you're on the phone, confirm that your address and other
paperwork are correct. This resolves many problems. One thing we editors
often encounter is the "left a note with the AP department expecting
payment, not realizing they clerk is on vacation for 2 weeks" or "you didn't
sign the purchase order, so we can't issue a check" syndrome. That is, the
client passed along the information without confirming it was received or
capable of being acted upon, or the clerk is waiting for a rubber stamp that
nobody knows they need to provide.

<<What bothers me too, is that I don't think it creates a solid, trusting
relationship to wait until the last day to pay, especially when you're
promising (verbally) that pay is coming sooner.>>

One of the first things you learn when working out of a bush camp is to
befriend the cook. <g> The equivalent here is to establish a polite working
relationship with whoever signs the cheques. Start with polite, helpful
inquiries ("I want to confirm that I provided all the necessary information
on my invoice and that you have my address and contractor number written
down correctly"), and don't escalate until you're sure there's really a
problem. The first paycheque is frequently a bit of a hassle while everyone
works on the red tape; subsequently things should improve. If they don't,
then it's time to escalate.

If it's the client himself who's signing the cheque (i.e., company is too
small to have a separate bookkeeper or accountant), then you have to
communicate the seriousness of the problem to the client, and insist that
the problem be resolved immediately. "The cheque is in the mail" is
meaningless; "your Fedex tracking number is 12345" carries much more weight.
Ask the client to send the payment by courier and call you back with a
tracking number.

<<First, what options do I have if I don't get a check by the end of the day
Monday? Can I claim that this company
doesn't have the right to use the work I've created until they pay for it?>>

You can certainly turn this into a lawsuit, since the work has been
delivered and the contract specifies terms of payment. But that can create a
really toxic relationship and get you informally blacklisted, so use it as a
last resort. The trick in contracts is to always specify two things: First,
that the work remains your property until paid for and cannot be used before
payment arrives. Second, that unless a work is returned for revision within
1 week (or some other period) after submission, that it is considered to be
acceptable for the purpose of determining payment. In the latter case, it
usually helps to specify a maximum number of "free" revisions--to prevent an
unsavory client from submitting endless revision requests to avoid paying
you.

<<The thought has crossed my mind to call him, explain that... I have not
yet been paid for the work I've done (now nearly 4 weeks worth)>>

One thing that sometimes work is offering to visit them to collect the
cheque in person. Might not work if you're far away, but if they're close
by, this is a good step. If the person is at all recalcitrant, then state
politely but firmly that if you don't receive a cheque by overnight courier,
you will stop work and take measures to ensure that they don't use your work
until payment is received.

<<I have to wonder also if there is a cultural issue that I may be missing.
The owner and founder of this particular company is from India.>>

I wouldn't go there just yet. I've never heard that Indians are particularly
laissez-faire about payments--at least no more than any other business
startups. Never attribute to malice (or culture) what you can attribute to
simple incompetence--something that is (alas!) color- and culture-blind.

--Geoff Hart, geoff-h -at- mtl -dot- feric -dot- ca
Forest Engineering Research Institute of Canada
580 boul. St-Jean
Pointe-Claire, Que., H9R 3J9 Canada

"Wisdom is one of the few things that look bigger the further away it
is."--Terry Pratchett

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