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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 69369
Experience:  Over 5 years in practice
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If party A provides a service to party B. The agreement was

Customer Question

If party A provides a service to party B. The agreement was verbal that party B could pay party A once contracts started to come in. Party B then returned for further work to be done and then requested an invoice from Party A as to have a understanding of the value he now owed. The invoice was then sent. The work was completed on the 31st January 2012. Party A had not received any correspondence from party B. Party A then resent the invoice on the 17th June 2012 with payment terms of 14 working days only, along with a email requesting a update as to possible payment. Party B responded aggressively stating that the agreement was that he would pay us only if he got any contracts. Party A then offered 3 various payment options to establish commitment from party B. Party B rejected all options and then verbally agreed to pay 20% of the profit of any contracts he would get in. Party A then emailed party B on the 8th April 2013 for an update and to request a payment plan to be reviewed every 6 months. Party B agreed in a email to pay £60 per month including VAT. and to be reviewed every 6 months plus that he would also pay 20% of the profit on any of his contracts. My question is if we can and is it legally possible for us to be able to introduce interest should this start to drag out. into years.
Submitted: 3 years ago.
Category: Law
Expert:  Jo C. replied 3 years ago.
HI.

Thank you for your question . My name is Jo and I will try to help with this.

So, in short, you agreed a contract and have not been paid?

Customer: replied 3 years ago.

FOR JOMO1972



Yes, not yet anything in over a year and a half.

Expert:  Jo C. replied 3 years ago.

If you were to go to court and seek a CCJ then you would get interest at 8% per annum pursuant to the County Court Act.

That would run from the date of default.

But you must go to court. You cannot add interest of your own that was not agreed under the contract.

To be wholly honest, unless this is a sum exceed £5000 its not really in your interests to avoid going to court. It will be cheap and quick to issue against them and then he cannot just refuse payment when it suits him.

Hope this helps. Please rate my answer OK SERVICE or above and I can answer your related questions.


Customer: replied 3 years ago.

So I am now drawing up a promissory that he is to to pay us monthly instalments of £60 including vat, plus 20% from profit of any contract. This is to be reviewed every six months. The invoice is around £4100 and should he pay the minimum only it will stretch up to a total of 68 months with no interest. this means that the work carried out by ourselves hold no value and no profit to ourselves. Their fore would we be able to introduce interest into the promissory at a later stage to cover the financial losses or be able to charge him any administration fees should he default?

Expert:  Jo C. replied 3 years ago.
I'm not sure what you mean?

What's the point of doing that?
Customer: replied 3 years ago.

FOR JOMO1972


OK so you reckon that we should just go to court and issue a CCJ for him to make payments and that would include the 8% interest and leave it at that. He might argue that the original verbal agreement was for him to pay us when ever he gets a contract and that can take as long as it takes?

Expert:  Jo C. replied 3 years ago.
Was that the original agreement?
Customer: replied 3 years ago.

FOR JOMO1972


 


The agreement was verbal that he would pay us once contracts started to come in. It was an agreement to establish a joint venture and that he would use our services for all future contracts. He has not given us any further work or any commendations to the fact. He has now agreed to start making monthly payments. I am trying to find out that should he drag the payments out over 68 months, what would be the best protection for use to put in place regarding interest or loss of profit.

Expert:  Jo C. replied 3 years ago.
Ok. I see your problem.

Yes, he could raise that argument at court.

Given the situation you can ask him to agree to repay on this basis but ultimately if he will not then you are in difficulty. You can ask for a rate of interest but if he will not agree then it cannot be forced.

Its all very well to add this to the agreement you are preparing but unless he is willing its not enforceable.
Customer: replied 3 years ago.

FOR JOMO1972



The fact that he is has not continued to use us or maid any payment or held up his end of the agreement is irrelevant. We should just be lucky to get what ever he offers and for as long as he wishes to pay us. Is this the bottom line?

Expert:  Jo C. replied 3 years ago.
If the original agreement was just that he would pay when contracts came in then that is what you are stuck with I'm afraid.

The only thing you could try to claim for is the additional works.

You will have a claim for the whole amount at some point but only when contracts come in I'm afraid.
Customer: replied 3 years ago.

FOR JOMO1972



Thank you for all your help!

Expert:  Jo C. replied 3 years ago.
No problem.

All the best.

Please remember to rate my answer.

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