Practicalities of invoices and contracts

Cianos

Hi all,
We often take a payment prior to sending the first invoice. This is often just more practical and 'natural' in the flow of how we do business.

I'm wondering how this should relate to the terms of contract around an invoice.

If someone pays a downpayment, receives an invoice (within which the payment terms are outlined), are they bound by those terms save them not raising objection to the terms upon receiving the invoice?

Or can they only be bound to the terms of an invoice if they received the terms/invoice prior to making any kind of payment?

This would always be where the price/service are quite well defined. Is it simply that if they've given the go ahead for the service at the agreed price, that they're bound either way regardless of the payment terms/schedule outlined in the invoice?

Thanks

Gloomtastic!

Cianos wrote: »

Hi all,
We often take a payment prior to sending the first invoice. This is often just more practical and 'natural' in the flow of how we do business.

I'm wondering how this should relate to the terms of contract around an invoice.

If someone pays a downpayment, receives an invoice (within which the payment terms are outlined), are they bound by those terms save them not raising objection to the terms upon receiving the invoice?

Or can they only be bound to the terms of an invoice if they received the terms/invoice prior to making any kind of payment?

This would always be where the price/service are quite well defined. Is it simply that if they've given the go ahead for the service at the agreed price, that they're bound either way regardless of the payment terms/schedule outlined in the invoice?

Thanks

For a contract between two parties to be complete, there has to be an action (you sending them an invoice) and a reaction (them paying a deposit) or vice versa as you have described.

This could also be the client signing a Confirmation of Order or sending you a Purchase Order Number.

As for the terms, not sure of the legalities, but they are usually always negotiable by either party. They are also the reason we have a thriving legal industry.

Cianos

Gloomtastic! wrote: »

For a contract between two parties to be complete, there has to be an action (you sending them an invoice) and a reaction (them paying a deposit) or vice versa as you have described.

This could also be the client signing a Confirmation of Order or sending you a Purchase Order Number.

As for the terms, not sure of the legalities, but they are usually always negotiable by either party. They are also the reason we have a thriving legal industry.

A contract can also be formed verbally though, right? So if someone says "Please do ABC" and I say "ABC will cost you €1000, and I request €500 now", and they pay the €500, then that's effectively a contract.

If I then follow up with an invoice marking their payment, with my own outlined terms, what happens then if they're unhappy with the terms?

I'm wondering are they effectively obliged to pay the remaining €500 by entering into said contract irrespective of the specifics of the invoice, for example a due date for the remainder of the payment.

Gloomtastic!

Cianos wrote: »

A contract can also be formed verbally though, right? So if someone says "Please do ABC" and I say "ABC will cost you €1000, and I request €500 now", and they pay the €500, then that's effectively a contract.

If I then follow up with an invoice marking their payment, with my own outlined terms, what happens then if they're unhappy with the terms?

I'm wondering are they effectively obliged to pay the remaining €500 by entering into said contract irrespective of the specifics of the invoice, for example a due date for the remainder of the payment.

AFAIK verbal isn’t worth the paper it’s not written on. Your word against his. Start negotiating....

Cianos

Gloomtastic! wrote: »

AFAIK verbal isn’t worth the paper it’s not written on. Your word against his. Start negotiating....

There's no dispute going on, I'm just wondering what the limitations are in defining the terms of an invoice after a contract has been entered into (i.e after a downpayment has been made)

Axwell

Cianos wrote: »

If I then follow up with an invoice marking their payment, with my own outlined terms, what happens then if they're unhappy with the terms?

I'm wondering are they effectively obliged to pay the remaining €500 by entering into said contract irrespective of the specifics of the invoice, for example a due date for the remainder of the payment.

They should be asking the terms before or at the time of making the down payment but it is also in your interest to make sure they are aware of them so you don't have hassle down the line when looking for the rest of the payment. Why would you not have a contract in place or agree the terms of the invoice and just send it to them there and then via email and get paid instead of sending it later and leaving yourself open to hassle?

The legality and limitations as regards the terms and conditions of invoice are probably a bit grey and would just lead to back and forth - the product or service you provide is what the verbal contract is agreeing to i.e. you will do abc for X amount. As long as you do and they are happy you should be paid. When you are due to get paid however is really something you should be outlining at the start for the sake of getting paid on time and keeping things simple. Agreeing the terms and invoicing them there and then is a tiny addition to the process you already described and it seems crazy not to just take the extra 2 minutes to do it there and then.

waynerooney

Cianos wrote: »

... Is it simply that if they've given the go ahead for the service at the agreed price, that they're bound either way regardless of the payment terms/schedule outlined in the invoice?

Thanks

A key premise of any contract is that both parties understand the promises made therein. If there was no clause in the contract related to payment terms, then it's unfair to refer to those terms in a contractual context.

Gerry T

When quoting a job put in a line saying the offer is made on the basis of abc Ltd terms and conditions of contract.
This should cover things but really you should attach T&c's with you quote as saying their available on request isn't good enough.