Help - customer cancelled contract halway through

atb

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Jan 25, 2008
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Twickenham
Hi - anyone out there who can help? I'm a business owner in the construction industry (glorified way of saying Im a painter and decorator ...). A customer for whom Im working simply cancelled the rest of my contract to redecorate his house - for no good reason. What kind of legal redress might I have? Thanks in advance for your comments!
 
I just posted the below on a different thread yours is very easy.

Just follow the same steps.

if you have no other issues just invoice them for the full job, then letter 1, 2 and small claims.

Do not get into arguments with them, as you will no doubt prejudice yourself, just state why you do not agree with their view.

Regardless if you had a signed contract that is not a concern, there is no legal impediment to the parties entering into a contract based on their conduct and verbal instructions and as there was clearly a contract between parties, you are in a good position.

You have to be firm with yourself and get paid.

So invoice them.
send debt letter 1
send debt letter 2
send to court.

Any letters in between telling you why they are not going to pay you send a 2 paragraph letter back saying.
Quote:
"I have received your letter of xx and note the content within.

I do not agree with your position, and I state clearly now that it is our position that a order was placed, worked scheduled and started and that the full value of the work must be remitted.

Accordingly I stand by my letter of 1st Jan 2007 and please remit by return."
The county courts are cheep and informal and in this case they is absolutely no need for a lawyer as it is will established they had no right to cancel the order and that you have the right to reclaim damages.

If any of that does not make sense just ask.
 
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do you have a written agreement/contract with them?
 
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sorry hit send then when I meant to hit preview :(.

No doubt he will phone you to tell you to go away after the invoice, just state calmly that you entered into a contract and you scheduled the work, and within contract law you are entitled to be remitted for any damages, and in this case that it is the balance of the invoice, (do not charge for goods if you priced for them and have not yet ordered them, if you ordered them invoice for them but remember they will be his once paid for).

Don't worry the only way you would not get paid for this is if you decide to write it off, there is no legal reason.
 
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do you have a written agreement/contract with them?
absolutely no need for a written agreement in this case, as he clearly had a contract as he done half the work. Same as me taking the car for an MOT, no written agreement but I clearly give them the car to work on. I can worm out of paying most things but not paying for that MOT.

Before you go to see a solicitor invoice him, do it by hand in the morning.

If he puts anything into the pot like bad workmanship after he gets his bill post back as that will not stand either. Although you have an obligation to provide a reasonable standard of workmanship under the sale of goods act, you also have the right afforded by the same act to correct/refute such claims.
 
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atb

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Jan 25, 2008
10
0
Twickenham
Ashley - no worries. This is even clearer. Thanks. To play this back to you all, it seems that I should invoice the full value of the contract (which is my time alone) plus the value of goods supplied to date (paints etc).

When I get told to go away (expected reaction I guess) I simply follow up with 'sorry but you do need to pay up' letters 1 and 2 if necessary.

When this elicits no response it means I take recourse to the 'money claim online' site and process to get the monies owed from them.

Have I understood correctly? Thanks ATB
 
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Ashley,

good call!
 
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spot on, I would not even use a solicitor, one other thing do not use money claim online 'MCOL' it is Mickey mouse, if you do go that far, I would happily help you draft the claim.

Getting the claim form spot on can save loads of time and hassle, and a well drafted claim form will put most layman of entering defence.

particulars of claim like "claim for unpaid invoice" just makes people want to put their side of the tale across, and make you waste a morning.
 
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FYI, I spend at least a working day each week, invoicing and writing to people who cancelled orders with me, and it bugs the something out of me. Why the hell I should subsided other business as their contracts have fallen through I do not know, and frankly they should be invoicing who ever let them down for my invoice.

I nearly signed approved a purchase order from tesco this morning, and then read that they had overwritten my cancellation policy with their own which was gobble gob. I have it in my briefcase, I post it as in all my years never seen anything like it.
 
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It may be wise initially to ascertain exactly why he halted/cancelled the contract, then once this is known consider your next step.

If he puts anything into the pot like bad workmanship after he gets his bill post back as that will not stand either.

Is not entirely the correct position, on the assumption that there could be a claim for poor workmanship then the customer would be entitled to claim a breach of contract by you, have the work rectified and look towards you for damages.
There may be issues of paint on carpets or any number of things, but it seems a little strange to halt redecorations part way through.

I would suggest finding the reason for stopping the work before furthering at this point.
 
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You failed to quote the full pagargath.

If he puts anything into the pot like bad workmanship after he gets his bill post back as that will not stand either. Although you have an obligation to provide a reasonable standard of workmanship under the sale of goods act, you also have the right afforded by the same act to correct/refute such claims.
What you said is a second instance remedy not first under the Sale of Goods act, I maybe worded it wrongly. But for clarity I will say, if he makes claims of bad workmanship the Act gives YOU (the workman) the right to correct it or refute it, then yes if he still feels badly done to, he could look to have it inspected by a independent party, one presumes on forums that the workman would have the good standing to correct real faults etc.

The act was drafted to be very clear on this point.
 
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I must be misunderstanding the act then, apologies for that, I thought that a contract could be ended on a breach, this being so there would be not entitlement/right to be allowed to cause further damage.

Could you perhaps point me to this clear point ?
 
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atb

Free Member
Jan 25, 2008
10
0
Twickenham
Thanks again both of you. Ashley, your original point was not lost on me and FBP - thanks anyway. As it happaens the reality is that the work is very good (I guess everyone says that but this time its true) and we really do have a psycho of a Customer in the shape of the wife. She has estranged all her neighbours who refer to her as the nutter from ninety three. I know ths isnt necessarily relevant to you all but as you have all put a deal of effort into helping me a thought I might at least let you know that workmanship is not an issue here! ATB
 
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No problem atb, I was just a little concerned you may simply steamroll over the customer without finding out if he had infact reason. Not wishing to suggest your workmanship is anything other than spectacular :) but if there was issues with customer this needs to be found, (not beyond the bounds of possibility that he could stage photographic evidence of damage)

I was not wanting to turn this thread into a flame with Ashley, yes it is normal for a contractor to be given option to rectify, but this IS NOT A RIGHT purely a reasonable action.

Back to the issue at hand, I would still urge that you establish asap if there is a reason for the attempted cancellation, if there is no just reason coming from the other side then full steam ahead for payment of invoice.
Would it not be possible to call round or telephone the customer to speed the process.
 
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estwig

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Sep 29, 2006
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If a client asks you to stop work halfway through a contract, you must first clarify that they are canceling the contract, then you reply by saying you accept their cancellation.

You are entitled to be paid for work completed and you are entitled to claim for lose of profit on the remainder of the contract, you may also be able to claim for waiting time.

You cannot invoice for work you have not done.

If there is no signed written contract, then the work is assumed to be done under the JCT small works contract.
 
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estwig

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To the OP, you have been given some bad advice in this thread, seek legal advice, are you a member of any trade organisations, they will help as will Business Link or pay a good construction specialist solicitor. These type of cases are usually beyond the skills of the average High Street, divorce, accident claim type of solicitor.

Good luck getting your money mate, get your teeth stuck into 'em and don't let go.
 
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atb

Free Member
Jan 25, 2008
10
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Twickenham
FPB, Keith, thanks again (beginning to sound like the cracked proverbial ..). Sound advice from both of you, I will indeed seek appropriate legal advice. Im sure the following will become transparent at that point, but - if the vehicle for charging for work done is the invoice, what vehicle and process is used to claim for the loss of earnings (in this case the rest of the value of the contract)? atb
 
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First of all, I will say you should form your own opinions, browse the web, examine many sources and if need seek the advice of a insured qualified legal professional.

I do not consider the advice I have given you as bad advice. I have not gone into the ins and outs as I did not feel you would benefit from them.

If you do intend to involve lawyers I would like to point out your cost protection and more impoartly what you would be able to claim from the defendant.

The Small Claims Track

Claims that have a financial value of not more than £5,000 will be allocated to the small claims track. The court may adopt any method of proceeding at a hearing that it considers to be fair. Hearings are informal, the strict rules of evidence do not apply, the court need not take evidence on oath, it may limit cross -examination, and it must give reasons for its decision. No expert evidence may be given except with the court's permission and no solicitor's costs may be recovered.

The Fast Track

The fast track will be the normal track for any claim which does not come within the small claims track and which has a financial value of not more than £15,000, provided that the trial is likely to take no more than one day. When allocating a case to fast track, the court will give directions for the management of the case and set a time table for the steps to be taken between the giving of directions and the trial. When giving directions the court will also either fix the trial date or a period (not exceeding three weeks) within which the trial will take place. The standard period between the giving of directions and the trial will be not more than 30 weeks. The amount of costs recoverable in fast track cases is strictly limited. For example, the maximum basic trial costs that may be awarded is £750 for cases where the value of the claim exceeds £10,000, plus an additional £250 if the court considers it necessary for a party's legal representative to be present in addition to an advocate.

The Multi-Track

The multi-track is the normal track for all claims for which the small claims and fast track qualifications do not apply. The court will be responsible for the management of multi-track cases and must fix a trial date, or a period within which the trial is to take place, as soon as possible.

A JCT contract has no assumed standing in law; in my mind I can only see the possibility of any legal standing is if within your standard terms and conditions you had the clause.

If no other negotiated contact is in place it is considered that the work is carried out under the standard JCT minor works contract.

And I also minded to argue any such clause would be unlawful under the unfair contracts, as the JCT is an item that needs a remittance to get a copy and no comumser could be put to that expense.

As to confirming that you must first clarify that they are cancelling the contract, then you reply by saying you accept their cancellation. The fact you have stopped work is proof to this fact, and I can see no need to draw this fact out.

As to invoicing until you invoice no money is due.

As to the loss of profit on the remainder of the contract or invoicing for work not done, that is not my take on the situation.

There are many ways to look at the issue of charging for the undone work.

In this case I am using the breach of contract angle.

As they have breached contract you are entailed to recover all out of pocket costs and also loss of profit. I had taken the decision this was you only so all profit was your labour and I had taken that into account and also why I mentioned materials. I agree that you would need to break down the invoice. But that would be simply a case of working pro-rata what was worked and what was the cancellation charge. Although Keith is right in what he said, it also overly complicated for a small claims matter.

I understand where Keith is coming from, but this is not Balfour Beatty -V- Scot Power (one of the most comical breach of contract cases of modern times IMO Google it). But a small value claim (I presume).

It gets even more complicated then that when we start to consider you need to reasonably "mitigate your loss", ie you should find new work. So on that scale if you take on any new work the period you should have been there, that has profit has to be removed from what you can claim from the consumer, but you would also be able to recover the extra costs of placing adverts in your local paper to bring in that new work. But if you where to bring work forward by a few weeks, you still have a gap in your books and would not have mitigated any loss, but if you should find work for the period of the brought forward work you have then mitigated your loss and the above applies again.
It even more complicated than that, that is why these cases must stay in the small claims courts, as to the moment they go fast track or mutli track all they are fee generating exercises.

I feel my advice is sound, but I will concede that it goes straight for the jugular, and in hindsight a informal contact would probably be advisable. Although that said I would not, as they made their bed IMO (sorry L).

Also when choosing a lawyer if you do not have one in mind, ensure that it is on a free pre appointment basis, and only appoint if you feel happy with replies.



And above all else good luck.
 
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A bad situation and clearly the customer is being a bit or a prat.
I would feel that there may well be a claim for loss of profit and I would try to claim the entire contract price, indeed things could get overly complicated so trying to keep things simple in the first instance but not dallying is pretty important.

To take further action (small claim as suggested by Ashley best) you would need to show that you have attempted to get the money owed giving chance for payment/or agreed settlement, court is meant to be a last recourse really. But in reality the more the customer sees you are intent on bringing the matter to a close quickly the more he would probably settle.
Find out if there is any valid reason which may give you problems at later stage. If none, issue invoice immediately (personally I would invoice for all works done + materials and a second figure for loss of profit (labour cost)) and advise that he is infact in breach of contract give him 7 days, if nothing heard hit him with the LBA, this way you have acted reasonably, tried to settle but been forced to take the matter further, As previously advised the small claims is very informal, fairly cheap and you self represent.

One word of caution though, if the defendant offered a settlement before hearing give it serious consideration, if you were to refuse and the judgement was equal to or less than that offered to settle then you might be hit with the defendants costs/expenses.
 
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estwig

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Sep 29, 2006
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A great post Ashley thank you, we have unfortunately been involved with many cases like this over the years and currently have 2 cases similar to the one the OP described.

Being a builder and not an expert in law, I have always put the case straight in the hands of our solicitors, we always win, usually settled just before court.

But it does always seem a very long winded, pompous, drawn out affair, now half of this is the solicitor doing their job properly and leaving the other side with no where to go and the other half is just legal fluff and nonsense. We never get all the costs either and the other side loses out, so there is never a clear winner.

I will look at some of your suggestions for any future cases.
 
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atb

Free Member
Jan 25, 2008
10
0
Twickenham
Hi all - I really do appreciate all your inputs. I consider this thread to have been a positive one with lively debate, which from my point of view has proven very informative. When I posted my original question I did not knmow where to go with this as it has never happened to me before. And now I have a distinct way forward - it seems pretty safe to say that I do indeed have a case of some sort, and my best way forward is to seek local advice from a legal professional who has construction experience. For this I am very grateful to you all. So please do carry on the debate as you see fit, and bear in my mind my thanks. Regards ATB
 
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maxine

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Oct 13, 2007
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Hi Atb,

Sorry for joining the party late :) My advice now is to invoice for the work done to date plus any costs incurred up to the point of termination, and then chase up that payment through the courts as Ashley suggests. Be prepared though for a defence to be filed if the customer claims they were not happy with the work that was done. When I say be prepared I mean keeping any evidence to hand such as emails or write a short summary of the date and the events that took place on those dates specifically with whether you asked on any dates whether the work was satisfactory or not or whether the customer complained about any aspects in order for you to put right before they terminated the contract. In my experience people tend to have a gut feel on why the contact was cancelled. Are you sure there were no signs of this? Did they give you any reason at the time? I only ask as this will help you to predict how this is likely to go.

It's all very well looking at areas of common law and sale of goods acts etc but in order to avoid this situation in future I believe the best thing you can do is to have a set of terms and conditions drawn up specific to your business that state clearly the notice period of termination and any fees or penalties that will be due. This will be a lot more enforecable if you can prove that the customer was aware of this before they entered into an agreement with you.

Regards
Max
 
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atb

Free Member
Jan 25, 2008
10
0
Twickenham
Hi Maxine

No worries - glad you joined the party! Yep, all points duly noted - including your last point about Terms and Conditions. I'm now working on including a specific set of T+Cs for the future.

As for gut reasons, yes, I have a gut feel for customers real reasons for cancelling which are purely personal on her part. I wont go into specifics but she has an overdeveloped need to control and in the end was actively creating win lose situations (you really dont want to know). To my credit I didnt respond. Which is probably the real reason for cancelling. Anyhow all that doesnt really help at all as it is all non material.

They gave no reason at the time but today I received a letter from them claiming that the work was unsatisfactory, I failed repeatedly to respond to their request for me to fix them. All of which, I assure you, is fabrication. I suspect they have been this route with others before me and know the ropes ......

Your point about making notes about what really happened is well taken! As an individual I tend not to dwell on all this manipulation stuff and not only try to rise above it but also ignore it - which in this case, I am beginning to realise, may not be sensible. I now have my notepad in hand!
 
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maxine

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Oct 13, 2007
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Hi Atb,

I think it is positive news that you had a letter today. At least they are replying to you now rather than later on down the line when you have incurred court fees.

Does their letter give specific detail on areas they they are not satisfied with? If not, then I would ask for this rather than a blanket statement saying they are not happy. If it does give the detail, then I would take the opportunity to reply to those in detail stating your case. The same applies to when you were asked to rectify your position and how you responded at the time. Remember that this letter as your reply is what you will refer to in court later if you don't get any joy.

You could then offer in the letter to rectifiy any particular things that are preventing payment being made and set out what exactly you are prepared to do. Alternatively, you could offer a goodwill gesture off the value of the bill but this is a gesture of goodwill and not compensation or accepting blame.

Hope that helps and let me know if you want me to have a look over your letter for you :)

regards
Max
 
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