Yesterday I once again heard how a contractor was not getting paid for work completed. I asked him what it said in his contract, and the reply was ‘I don’t issue contracts’. Even more surprisingly, he stated that this was the 3rd time this has happened since May. At this point, I need to stress that I am not qualified to give legal advice – this post is generic information designed to highlight the importance of a ‘provable’ contract.
What should be in a contract?
An effective contract needs to include several key points – for example: an offer, acceptance of that offer, and the consideration (the cost). Also, you need to have the capacity, which refers to the ability/authority, to enter into the contract. These are all legal terms, but the point to remember is that the client needs to accept the quotation and terms.
Don’t forget the payment terms!
Where there is a contract in place, I often hear that the timescale for payment (payment terms) is missed off. These are important, because even when you agree a price, without these terms, there’s no commitment to when they will pay. Don’t leave yourself on the back-foot – agree up front a timescale for payment. Typically, this is 5 working days after the work is completed, with a penalty if payment is not made on time. Alternatively, you could quote a price with a 5% discount if they pay quickly, for example within 5 days.
While a verbal agreement can still be viewed as a contract – how do you prove what was agreed? With the digital world we live in, you could send this via email, but can you really list your contract criteria on a text message? I stress again that I can’t give you legal advice, but do strongly suggest that you seek expert opinion and get a contract drawn up. Yes – it might cost you several hundred pounds in legal fees – but it may well be cheaper than the client refusing to pay.
Head over to Facebook to let us know your thoughts, particularly on the payment terms, as we know this is an issue.
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