Re: Client Won't Pay

[Martha Cosgriff <mcosgriff -at- TELE-TV -dot- COM>]

     In the US, typically a contractor works one of two ways:

     1. Independently-- he contracts directly with the client and signs a
     contract usually generated by the client's lawyers.  This contract
     invariably contains a clause assigning all patent and copyright rights
     from work performed on the contract to the client.

     2. Job Shop--a contractor acts as a subcontractor through a technical
     job shop, and in this case, signs the contract with the job shop for
     the job to be performed for the client.  This job-shop contract also
     invariably contains a clause assigning all copyrights and patents from
     work performed on the job to the client.

     If the client doesn't pay the direct contractor, there still is little
     recourse re: the patent rights, because it usually isn't difficult for
     the client to prove that work on the patentable/copyrightable issues
     occurred in one form or another before the arrival of the contractor.

     So your claiming copyrights or patent rights would not usually be a
     threat to the non-paying client.

     Also: not every jurisdiction in the US has a Small Claims Court. In
     some places you just gotta see a lawyer.

     Another note: Some project managers sign for services/goods when they
     know very well they aren't supposed to.  And, some sign in ignorance.
     The best advice is for the contractor to check with the CFO of the
     prospective company to see just who can, and who cannot, authorize
     payment.  That'll take care of that problem.

     You can also advise them that you will be paid weekly, and your
     invoices should reflect this: e.g.., "Terms: Net 7 days."

     However, many companies' contracts have a clause stating unequivocally
     that they will NOT pay before 30 days, and if you want the job, you
     have to renegotiate this (not easy, since their accounting is not set
     up to accommodate it) or put up and shut up.  And wait.

     If the company you are contracting with is a federal contractor, there
     are some legal cures, especially if it is a defense contractor.  All
     you have to do is find the program manager on the government side and
     complain about it.  Chances are you'll get your money fast that way!

     Regards,
     M.