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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 8445
Experience:  I have been practising for 30 years.
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We're a small digital marketing company, and one of our

Resolved Question:

We're a small digital marketing company, and one of our clients has rung to say they "will be going into liquidation" so cannot pay our outstanding invoice.
The invoice covers some general support and the hosting of the site. It is overdue.
We could switch the site off, or we could restrict their admin user access to the site. It's an ecommerce site so will still be taking orders.
I just want to know if there are any repercussions of an action such as this?
Submitted: 21 days ago.
Category: Law
Expert:  F E Smith replied 21 days ago.

Is keeping the site going going to cost you anything? Is it likely that someone would take the company over or will it just close altogether?

Customer: replied 20 days ago.
We pay for the whole server and host a number of sites on it. So there is no additional cost to keep the site going, just less revenue.The guy has implied he will go bankrupt and then start up again using the same software.
Expert:  F E Smith replied 20 days ago.

In this situation, I would take a long-term view and that view would include this what benefit there is to you to keep the site going is bearing in mind that the guy is going into liquidation starting up again. If you keep the relationship going, it may be that you get the ongoing work which may be valuable to you. There is no guarantee and that is commercial judgement for you.

Legally, you are not obliged to provide a service for which you are not being paid or which you are not going to be paid for.

You say that you pay for the whole server hosted a number of sites on it but the reality is that the cost of that hosting is divided between the number of sites and hence, the proportion cost for all the other sites is higher.

What you can’t do is take the site down and put a sign up which says that the bill has been paid.

In cases like this, I have known sites suddenly and miraculously have a glitch which needs remedying and would you believe, the website company cannot resolve the glitch because of course, they are not going to get paid!

If this is not already covered in your terms and conditions whereby you will immediately switch a site off as soon as a bill is not paid and overdue , for example 14 days, then you need to immediately insert that into your terms and conditions. Wouldn’t help you on this particular occasion but for future occasions it does mean that you wouldn’t need to have asked the question. You also need to put in that you are not liable for any losses as a result of that action.

What might want to consider doing is to let the site continue to take the orders so that they cannot allege any loss of revenue from your actions but restrict the use of it.

Ultimately, the company has no money to pay you and regardless of what you do, it has no money to pay you, it cannot litigate with you and take you to court.

Can I clarify anything arising from this?

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F E Smith, Advocate
Category: Law
Satisfied Customers: 8445
Experience: I have been practising for 30 years.
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