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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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My company produces websites, we have been working on a very

Resolved Question:

My company produces websites, we have been working on a very large scale website for 9 months. The company has made c60% staged payments to date.
The project overall is significantly over the quoted timeline we determined, partly their fault but 70% ours as we underestimated the size of the job. We have been transparent throughout and at no stage have our client issued any warnings, deadlines.
The website has been 95% ready since September and we have been working on client snags/amends etc since this date. Throughout this process the client has not raised any concerns about any element of the websites quality etc.
Friday 31st October we confirmed that the website was complete and fully functional and await any final snags or bugs, so that we may repair. Our client emailed and stated due to the project being 20 weeks overdue and coupled with the fact they are not happy with the quality of our work they have referred it to their solicitors. We have asked for details of their dissatisfaction, and requested an emergency meeting....they have agreed but only after they have had legal advise. we believe that they will try to argue a 'Not Fit For Purpose' argument.
They have signed our contract which determines if they terminate our services proportionate fees will still be due. (10 week contract, cancelled at 7 weeks would equal 70% payment).
My question is this, assuming that:-
1 Their new website is 100% functional.
2 They have signed off all the design elements (creative look)
3 We have received no warnings, deadlines.
What is our position Vs theirs?
***** *****
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.,

Alex Watts :

For now please let me know whether they signed off the project as formally complete?

Alex Watts :

If so, is it in beta testing or is it fully functional?

Customer:

They have not signed off the project, but it is complete.

Customer:

The website is an online company formations (live linked to Co House) you can incorporate a company, change director details etc...very complex, and each stage is tested at a time. All elements are functional and have been tested.

Customer:

Do you need to see the contract?

Alex Watts :

No, I do not think I need to. What is the value of the works and payments outstanding?

Customer:

The website initial value was £18,750.00, we have also had to rebuild a substantial database as theirs was broken/floored, which took 5 weeks (part of the delay) we charged and additional £2000.00 for this, the balance excluding VAT is £9500.00

Alex Watts :

Ok - was timing part of the contract, ie the website would be completed by x date?

Customer:

Timing was part of the contract, and we self invoked a penalty of 5% of the contract value for each week is was late. When we realised we would not complete the project on time, i asked to be released from this contractual element and they agreed.

Alex Watts :

Did they agree in writing?

Customer:

They agreed in email

Alex Watts :

Ok. They never complained about the lateness or functionality of the website?

Customer:

They have verbally expressed concern about how long it was taking, but have not issued anything in writing, or issued any verbal or written deadlines or consequential communications if the website was not ready by xxxx at no stage have they issued any deadlines or else, type communications, verbally or email. The functionality so far has not been questioned either they have simply said 'The Quality of our works' is not to satisfaction!

Alex Watts :

Ok - did they see the functionality and test it before completion? ie step by step?

Customer:

They have been testing functionality since September, at each stage they have liaised with our programmer to make amends, fix bugs etc. c10 days ago i was requesting any final bugs/amends and we received just one, now fixed.

Alex Watts :

Ok - so no issues until now then, even though they have been testing?

Customer:

Yes issues but all addressed along the way

Alex Watts :

OK - I understand.

Alex Watts :

Your position is this:

Alex Watts :

You have provided a functional website to their specifications.

Alex Watts :

You are very late, but they have released you from a penalty clause

Alex Watts :

There have been issues with the website but these have been addressed.

Alex Watts :

At no stage until now have they said that there is a serious problem, as you would expect someone to do so

Alex Watts :

If they were spending this sort of money you would expect them to raise issues at an early stage

Alex Watts :

They are not taking issue with it being late just that it is not a quality product

Alex Watts :

This is strange given they have had input and been testing parts

Alex Watts :

No one expects a significant design to be 100% working straight away

Alex Watts :

It has to be tested and de-bugged, but that is why you work with the customer.

Alex Watts :

As for their position they can only claim under Section 13 of the Sale and Supply of Goods and Services Act, that is not acted with all reasonable skill and caer.

Alex Watts :

* care *

Alex Watts :

However you have been working with them, so my view is that their position is weak

Alex Watts :

You may have to make a deduction for late delivery but in terms of functionality I can not see what else you could do

Alex Watts :

In any event if they don't pay you can issue proceedings in the County Court.

Alex Watts :

To keep it a small claim you would need to limit any claim to £10,000 in total. Above this it would be a formal claim and you would need a Solicitor.

Alex Watts :

However of course until they pay you or this is resolved you could refuse to carry out more work or indeed with hold files.

Alex Watts :

If you have done the work and they have not paid then you own the files.

Alex Watts :

You could take them off the server if you have access

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

The detail above is quite detailed, are you able to give an indication as to what advise they will be receiving so that i may tailor my position to suit their argument?

Alex Watts :

Sadly I dont know what they have told their Solicitor. Their lawyer may just be saying that you are in breach because you are late.

Customer:

If they have released me from the lateness penalty is this not agreement or acceptance of the new position?

Alex Watts :

Well you are released from the penalty, not from the fact it was late.

Customer:

Could we reasonably expect to be advised of their position due to lateness prior to the website being comlplete?is being late a legal argument

Alex Watts :

Yes being late is a legal argument. But again you would have expected them to raise it at an early stage

Alex Watts :

But if you accept its 70% your fault then clearly that could be an issue

Customer:

An issue to cancel, not pay, get a refund for payment made etc? This is a huge point as it will form their attack/position.

Alex Watts :

A reduced payment, but I don't think they can cancel and refuse to pay

Alex Watts :

I think it may mean you wont be able to charge 100% for it.

Alex Watts :

But again they should have raised it earlier

Customer:

Perhaps no surprise but, should have and could have's are very hard to form a way forward. Naturally i shall be trying to find an amicable resolution, but it takes two, and if they are unreasonable i need to understand the strength or otherwise should it go to court.

Customer:

Does the VAT element place it over 10k or is this not taken into account?

Alex Watts :

I think you have a reasonable chance if you go to Court, above 50% which is what you need.

Alex Watts :

VAT element IS taken into account so you need to make sure its £10,000 or under to keep it as a small claim

Alex Watts :

I think in reality you can issue a claim, but it is likely it would be reduced by a Judge because of the delays.

Alex Watts :

But I think you have a claim

Alex Watts :

You did the work - they did not raise an issue until the end.

Customer:

okay, i may need further advise after my meeting, how do i reconnect with you?

Alex Watts :

You can post any new questions FOR ALEX W

Alex Watts :

I can then pick them up

Alex Watts :

Even if I am in Court I can usually respond within a few hours

Alex Watts :

Can I clarify anything else for you about this?

Customer:

Thanks Alex, your advise so far has been quite succinct. Do you think i should set out my position prior to our meeting, and if so is their a particular legal format i can copy?

Alex Watts :

I would wait and see what they say.

Alex Watts :

You dont know what they are going to raise and you dont want to make something of an issue of something they do not consider a problem!

Alex Watts :

Does that help?

Customer:

Good advise Alex, thank you...no further questions for now

Alex Watts :

Great. Can I ask you to rate my answer before you go today - the button should be at the bottom of the screen

Alex Watts :

If you need more help please click reply

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