Unlike in a consumer contract, in a business contract there is no automatic right to cancel.
If the whole matter went to court for breach of contract, they would normally be awarded a percentage of the contract value equating to the loss of profit. This is what their severance fee is.
There is another issue which gets taken into account and that is how long after you entered into the contract did you cancel? If it was five minutes later, they could clearly have done no work on it so actually haven’t lost anything whereas if you cancelled a long way down the line, they may have actually done a load of work.
It’s exactly what they are saying.
I would be inclined to pay them 10%.
Send them a cheque for that amount telling them that it’s in full and final settlement and that by the action of cashing it and putting it in the bank, they accept it as such and if they don’t, they should not cash the cheque but they should return it to you, and issue court proceedings which you will defend on the basis that the charge is unreasonable and therefore unenforceable.
You need to head the letter Without Prejudice Save as to Costs and then they cannot produce it in court as any kind of admission that you are in any way liable.
It works 9 times out of 10 on the basis that is better to have a cheque in the hand for the smaller amount rather than a court argument over a large amount which they may not win.
The worst that can happen is that they send it back.
You could always try sending them a larger amount and see whether they accept that and ultimately, if they feel that they are entitled to more, and you don’t want to pay it, they will end up in court and you would have to defend the action.
I am glad to help.
Hopefully, I have answered your query in a way that is simple and easy to understand.
I would be more than happy to clarify anything else for you. In the meantime, thank you once again for using our services.
I am happy to answer any specific points arising from this.
Please be aware that my answer is based strictly upon the information you have given me.
If you still need any points clarifying, I will be happy to reply because the thread does not close. In fact, it remains open indefinitely.
I am always happy to answer any further questions you have on any new thread in which case, please start your question with, “ For FES only”.
That only applies to new threads, not this one. You have me exclusively on this one.