Client threatening to sue

[gator123]

I started working for a IT company in Jan. I work 8 hours a day for £150 per day and have about 6 months of work. (week on, week off - 5 days per week) Up until now I have been paid on a weekly basis but then I was asked if I would be willing to help out with a large client they had signed up. I agreed but thought it would still be 7 days payment terms.

Since then I was asked to the office where i was told they needed to extend payment terms to 30 days as they were not being paid by the large client for about 30 days +. I did agree verbally to this even though I voiced annoyance at changes in terms. Work has been so quiet lately so I needed the work, although my other work is now picking up so this is not so much of an issue. There is no written contract at all, although I did agree to do the dates by email.

They now are not paying on time. Current invoice is now 2 weeks late. I asked them what was happening and I was told I would have to wait until client paid them. They said I agree to that in front of 2 company directors but with no independent witnesses.

I stated I would not do anymore work unless they paid. They said tough and that I would have to pay for the lost contract if I left.

I cannot take the risk of being sued but I also cannot wait so long for my money. What are my options? Would they have a valid reason to sue for breach of contract.

[Murder1]

They said tough and that I would have to pay for the lost contract if I left.

Where does it state that? There's no written contract and I'm assuming you didn't agree to that via email. If they haven't paid you within the 30 days as detailed in any email agreement, I like you would down tools and look for work elsewhere, I can't see that they have a leg to stand on in terms of being able to sue you.

[DirtyDog]

Since then I was asked to the office where i was told they needed to extend payment terms to 30 days as they were not being paid by the large client for about 30 days +. I did agree verbally to this even though I voiced annoyance at changes in terms. Work has been so quiet lately so I needed the work, although my other work is now picking up so this is not so much of an issue. There is no written contract at all, although I did agree to do the dates by email.

They now are not paying on time. Current invoice is now 2 weeks late. I asked them what was happening and I was told I would have to wait until client paid them. They said I agree to that in front of 2 company directors but with no independent witnesses.

So you agreed 30 day terms, and they are late. This is where you really need a written contract, as it would easily deal with whether you need to wait for them to get paid before you get paid. Follow the advice on The Late Payment of Commercial Debts Regulations 2013 - Pay on Time and chase for the invoice. The question is whether the two directors are prepared to go to court and lie about what you said or not - if they are, then there isn't much you can do but wait.

I stated I would not do anymore work unless they paid. They said tough and that I would have to pay for the lost contract if I left.

Ask them to show you which point in the contract states that. If there is no evidence of you agreeing to that, then they can't enforce it.

What are my options?

Chase them for the bad debt. Walk away and find something else.

Sounds to me like they are having money worries if they can't pay you, so I wouldn't be extending them any further credit. If they want you to continue, then get a written contract in place with weekly invoicing and seven day terms.

[LisaContractorUmbrella]

If you have evidence of the work being done and approved by the client and they have put their payment terms (of 30 days) in writing, which you have then agreed to then you have a far better case for legal redress than they do if they have not paid you on time. You can, quite legally, add interest to the invoice for late payment - this has been raised a few times on this forum so there should be some useful links for you to check out

[d000hg]

If they are not able to pay you until they're paid, that sends warning flags the company is teetering on the edge of collapse and might not pay you anyway.

Unless it's a really tiny startup where I can understand sometimes this is the only way you can survive. But in that situation they shouldn't be putting on airs and graces, they need you.

[northernladuk]

What's your opt in/out status?

[DirtyDog]

What's your opt in/out status?

Does that apply here - there's no mention of an agency at all in the original post

[northernladuk]

Does that apply here - there's no mention of an agency at all in the original post

Ah, I assumed there might be as he mentioned their client a few times but could be a supplier I agree.

[Safe Collections]

Chase them for the bad debt. Walk away and find something else.

Sounds to me like they are having money worries if they can't pay you, so I wouldn't be extending them any further credit. If they want you to continue, then get a written contract in place with weekly invoicing and seven day terms.

This.

We wouldn't put any stock in the claim that you will have to pay for the lost contract if you walk. Without a contractual relationship that explicitly states this is a possibility they are unlikely to have any chance of success...

[tractor]

...

The OP also didn't mention any notice period in the original contract. If there is none, just leave, if there is notice and you don't want to extend credit, just give notice and get a cold for the length of the notice period. Not very professional, but neither is breaking payment terms or threatening suppliers. quid pro quo