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Ash
Ash, Solicitor
Category: Law
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Experience:  Solicitor with 5+ years experience
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FAO Alex Watts. . A customer is holding back on paying

Resolved Question:

FAO Alex Watts.
Hello.
A customer is holding back on paying 2 invoices A&B.
Invoices A&B are not related.
Invoices A requires the completion of some agreed remedial work and it is accepted that payment will be delayed until the remedial work has been completed.
Invoice B does not have anything wrong to delay its payment.
The customer will not pay invoice B as he is holding back waiting for the work associated with invoice A to be completed.
This does not seem right to me. Can the customer legally do this?
Thanks
Pete
Submitted: 1 year ago.
Category: Law
Expert:  Ash replied 1 year ago.
Hello my name is ***** ***** I will help you.
Do you have any terms and conditions? If so, does it allow for withholding payment?
Customer: replied 1 year ago.

Thanks for the speedy response. Will get a copy and get back to you. It may take a few days to get hold of this.

Peter

Expert:  Ash replied 1 year ago.
Sure.
Alex
Customer: replied 1 year ago.

Below are the related clauses within the PO terms.

RIGHTS OF REJECTION

All goods found not up to specification shall be rectified or replaced to our satisfaction free of cost to us and within the time specified by us.

ON TIME DELIVERY

Compliance with the delivery lead times is an essential condition of the PO. Seller will make delivery of a shipment on the scheduled and agreed upon delivery date specified in this PO and/or meet the agreed upon milestone(s) and or completion date(s) for Services as provided in this PO and/or SoW. In addition to the Company’s other rights and remedies under this PO or at law and/or equity, the Seller will be liable for any liquidated damages assessed against the Company by a customer as a result of a late delivery by the Seller. The Company shall be protected by the full extent of statutory warranty. Irrespective of this the Company shall be entitled to claim from the Seller, at the Company’s discretion, either a cure of the default or a new delivery date. The right of the Company to claim damages instead of performance remains expressly reserved by the Company

MERCHANTABLE QUALITY

The Seller on acceptance of this order warrants to the Company that the goods supplied are of merchantable quality and agree to indemnify and keep indemnified the Company against all actions, costs and claims howsoever arising as a result of a breach of this warranty, notwithstanding that any defect in the goods should under normal circumstances be discernible on inspection by the Company.

LIMITATION OF LIABILITY

Except for amounts due and owing as payment hereunder, Company’s liability to Seller for any and all direct damages will not exceed the amounts paid under this PO.

For information the ‘goods’ supplied by the seller are various cabling components which when installed and connected provide a cabling network (basically for computers to talk to each other). The ‘goods’ comprise of both material product (cabling components) and installation services (labour to install the components). The goods are installed, fully tested as being technically compliant / fully functional and the customer has since the date of installation had the benefit of the goods. The goods were installed strictly in compliance with required timescales. There have been no complaints or issues regarding the goods technical conformance. The issues are aesthetic ie the cabling components should have been installed in a tidier manner. Rectification will require removal and repositioning of some of the cables which will if the customer so chooses to argue disrupt their business whilst this work is carried out.

The ‘MERCHANTABLE QUALITY’ clause is of concern to me. I would argue that the goods are of merchantable quality as they have been fully installed and fully tested (100% pass) and currently used by the customer.

Can the company withhold the payment of invoice A?

Given the description above does the 'Merchantable Quality' clause apply given that the issues are aesthetic and do not compromise in any manner the functional use of the installation?

Expert:  Ash replied 1 year ago.
Ok. Then they can't offset one against the other. If one job has been completed you are entitled to payment for that
Can I clarify anything for you about this today please?
Alex
Ash and other Law Specialists are ready to help you
Expert:  Ash replied 1 year ago.
Hi

I am just following up to see if there is anything else I can help with?

If you have not done so already might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.

If you need more help please click reply.

Alex