I have a client that is refusing to pay invoices for the past three months.
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ContractsCounsel verified
Hello, I have a client that is refusing to pay invoices for the past three months. This recently came up and I am not sure how to resolve it or what options I have.
I'm a consultant that works independently and I think this client may be running into financial issues but am not sure. They have paid my invoices for the past 12 months previously but are now saying they won't pay the last three.
Hello ******!
My name is Dolan and thank you so much for contacting me!
I just had a few quick questions for you:
1. Have they provided any reason for not paying or any justification at all?
2. How much do they owe you?
Thanks.
They haven't. I have been following up but they have not responded to me and it is starting to get worrisome. There hasn't been any indication they aren't happy with my work (I'm a supply chain consultant). They owe me $24k since I billed them an $8k retainer each month. $16k is technically overdue since my payment terms are 30 days.
The whole thing is really weird and has never happened to me before and I am worried about this since I'm not sure what I can do legally about it.
Ok thanks! Just a few more questions. What state is this in?
Cali
We are both in California
Understood! So you're just wondering what it is you can do here, correct?
Yeah or generally any advice you could give me on how to resolve it. They have been a good client for a while, so I don't want to burn the relationship if they need a bit more time since I would still be interested in working with them. But I do need that money and it is a lot for my business. Does that make sense?
What would other clients do?
Ok! I've been working on an answer while we've been chatting, so it'll just be a moment.
Ok sounds good. Thanks for the help.
I'm so sorry about this situation! I want to address your situation with a detailed response, so if you have any questions, don’t hesitate to ask because this law stuff can get complicated.
A breach of contract simply means that one party was obligated to perform and they have either not performed or have said that they will not perform. (Restatement (Second) of Contracts.) This applies regardless of whether the agreement was written or done orally. Typically, the aggrieved party is entitled to be returned to the same position they were in before the breach. You have some options you can explore:
In your case, it's simple: you provided the service and they have not paid up. So what this means is that you have to consider sending a demand for the money.
You can keep the tone friendly and suggest to them that you have to pay your bills like anyone else. You could even offer a settlement where they pay 1/2 now and the other 1/2 in the next 30 days on top of any other amounts that are owed.
Otherwise, given the amount that is owed, I strongly recommend hiring an attorney to send a demand if an informal demand does not work and then consider a lawsuit in superior court to recover the money. Does that help clarify things? I want to make sure I didn’t leave anything out.
So just to recap, you think I should send a demand to them directly (soft tone) to try and get them to respond. And if that doesn't work, have a lawyer send a demand letter?
Correct! This helps preserve the relationship while getting the money that you are owed, but gives you options if they refuse. I want to make sure we've covered everything thoroughly. Is there anything else you'd like to discuss, or any details I can go over again for you?
Is there anywhere I can find an example of a 'demand' that would come from a client?
I've looked online and only see templates that look like lawyers would use.
Also, would you suggest an email or sending them a physical letter?
Absolutely! So you can start here - https://www.contractscounsel.com/t/document-form-checkout/119 . So you can send this in any way you want. It can be text, email, certified mail, or in person. I usually send letters via email because it’s faster and cheaper.
Also, because I am in CA, I can review your case and draft a demand for you. My regular rate is $375 per hour; however, the template option is more cost-efficient for you for now.
Is the template something you drafted?
Also, could I buy that template and then have you look over it after I fill it out?
I think I will just send a demand in an email.
Correct! If the demand letter you send does not work, then you can hire me through this site and I can review your contract, invoices, and other letters and work up my own demand on your behalf.
Also, yes, I can review your demand for you. It'd only be $*** to review the demand and we can set up payment through this site.
Just so you know, I have a signed agreement from them too that says 30-day payment terms.
Ok understood.
So what happens if they don’t respond to my email?
If they don't respond, you have two options:
1. You can continue to send demands.
2. You could sue in court. In my experience, if they don't respond to two demands that you send, it'd be smart to hire a lawyer to sue in civil court to recover the money.
OK got it. I am guessing they will respond.
If they are having financial trouble, I like the idea of having them pay some of it now and some later. I am happy to be flexible with them, I just want my money.
Do you think demand letters are more effective coming from lawyers? I am wondering if I should just do that now.
In my experience, when lawyers get involved, it tends to occasionally frighten customers who may be struggling financially, reducing the chances that they will want to pay up because they are afraid saying anything will lead to further trouble.
Plus, there is a tendency that it hurts the professional relationship when lawyers get involved so early in the collection process.
Right
As such, having lawyers involved AFTER demands have been attempted suggests they aren't acting in good faith and you should sue at that time.
OK that makes sense. I am going to buy the template and will fill it out and send via email. I will come back to you if I have questions and may want you to review it.
Can I keep this chat open with you in case I need you in a few days?
How does it work?
Sure thing! You can keep this chat open. If you are done with the demand, you can shoot me a message here. Then, I will create a job on the site which then emails you a chance to accept and you can upload your draft letter and we can chat through there.
If you have additional questions about this over time, you can come back to this chat which is already included in your membership!
Ok that sounds good - thanks and will (likely) be in touch.
You bet! Thank you (AGAIN) for trusting ContractsCounsel.com with your question.
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Dolan W.
You need a lawyer who's more than just knowledgeable – you need someone who's on your side. That's where I come in. I'll be there every step of the way, offering clear communication and proactive solutions. Whether you're starting a business or navigating a complex legal matter, I'll help you make informed decisions and achieve your goals. I also have drafted many templates to save you money. Just use this link - https://www.contractscounsel.com/client/lawyer-profile/3764#Templates Why Choose Me? I put you first I'm proactive I'm efficient I'm accessible