Credit check failed PCG offered - how to cover us legally

[TurnerW]

We are a micro biz and I have a customer who has failed a credit check as their ltd company is too new. They are owned by a larger entity who passes the credit check. They want a contract for IT services (36 month term) in the new ltd company name, as they may sell that business in the future, and have offered a PCG. How can I process this? any advice? I guess I need to change my contract to refer to it. My accountants said the PCG is fine, but cannot legally validate it. Who can do this type of work and any idea on costs?

Thanks

Wayne

 

[Mark T Jones]

What is the size / value of the contract (how much up-front cost does it warrant?)

In a services contract there will always be some vaguary around actual delivery - and potentially scope to wriggle out on non-performance claims.

TBH, if the Topco is strong, and the subsidiary properly set up I'd be tempted to do it on trust.

 

[fisicx]

If they sell the company the contract may become null and void leaving you in the lurch.

If the company is sold the parent company no longer has responsibility so the PCG could end.

 

[TurnerW]

What is the size / value of the contract (how much up-front cost does it warrant?)

In a services contract there will always be some vaguary around actual delivery - and potentially scope to wriggle out on non-performance claims.

TBH, if the Topco is strong, and the subsidiary properly set up I'd be tempted to do it on trust.

Contract is around £23k and a lot of that is cost, so I'll still have to pay license for the full term even if they don't pay me. I'm also tempted to do it on trust, has worked 95% of the time in the past 10 years, but wanted to sound it out!

 

[fisicx]

Contract is around £23k and a lot of that is cost, so I'll still have to pay license for the full term even if they don't pay me. I'm also tempted to do it on trust, has worked 95% of the time in the past 10 years, but wanted to sound it out!

Can't you get the cost up front and then a monthly fee?

 

[Mark T Jones]

It's possibly worth using a template guarantee from someone like SimplyDocs. At least you can demonstrate intent should it happen.

 

[JEREMY HAWKE]

Wayne I would seriously look at getting some money up front as already suggested

 

[AlanJ1]

Wayne I would seriously look at getting some money up front as already suggested

Agree with this 100%