I have a client I have been trying to get payment from for over 3 months. Are there are 'pre' steps required before taking someone to small claims court?

A quick run down:

I have a signed contract with payment schedule (final payment was due in 30 days), and multiple emails acknowledging the that they have exceeded it. I have talked to the CEO, and was informed by email that the 'cheque was in the mail', which never arrived. So at this point they clearly aren't taking me seriously, so I want to escalate things.

I have a clause in the contract that I can take their site down due to non-payment. Should I enforce this AND proceed with small claims action?

Thanks for any advice

And yes, I have learned my lesson about not putting a site live until I receive final payment. I did get a down payment from them, but have revised my contract regarding final payments since this.

Small claims court is general designed to help people who aren't lawyers, so in general there aren't many pre-steps that you have to take.

But depending on where you live, the system is typically bogged down so it can take a long time to get things resolved that way. And even if you get a judgement, then you have the tricky task of actually trying to collect on it, which leads you right back to where you started. So you're better off using small claims court as a last resort.

In your shoes, I'd take down the site now, and see if anything changes. Tell them (at about the same time) that due to the inability to get your final payment, you have no choice but to enforce this clause of your contract. Give it a couple of weeks, and if still nothing changes, file it this with small claims.

As a general principle, it's usual best to show that you have taken every reasonable step to get the money before going to court. Number one, it's usually faster. Number two, you look much better in court.

--> not a lawyer, but have been in small claims court and similar administrative tribunals a number of times.

Small claims court is general designed to help people who aren't lawyers, so in general there aren't many pre-steps that you have to take.

But depending on where you live, the system is typically bogged down so it can take a long time to get things resolved that way. And even if you get a judgement, then you have the tricky task of actually trying to collect on it, which leads you right back to where you started. So you're better off using small claims court as a last resort.

In your shoes, I'd take down the site now, and see if anything changes. Tell them (at about the same time) that due to the inability to get your final payment, you have no choice but to enforce this clause of your contract. Give it a couple of weeks, and if still nothing changes, file it this with small claims.

As a general principle, it's usual best to show that you have taken every reasonable step to get the money before going to court. Number one, it's usually faster. Number two, you look much better in court.

--> not a lawyer, but have been in small claims court and similar administrative tribunals a number of times.

I think my email records pretty clearly show I have done everything I could possibly do to collect. So evidence wise, I'd be ok.

If I did take them to court, does it make the information available to other contractors who may be looking for info on the same company? I ask because I know other other contractor having issues collecting fromt hem. I obviously don't want publicly slander them and cause myself issues, but it would be nice to know that if I took them to court there is the possibility it could help someone else in the future.

What happens if you do take them to court, win judgement, and still can't collect. What is the next legal step?

if you want to sue them in small claims, advise them that you are going to do so in x numbers of days if they don't pay and then do so ... anything else is then an empty threat and there isn't any incentive to pay for them. And I would never threaten a client by telling them that I'm going to shut down their website - all you are doing is giving them notice of what's coming and giving them time to prepare. Just shut them down - they will figure it out and call you to negotiate. But don't negotiate and settle for future payment - keep them locked out till they pay in full. If they don't ever pay, at least you have the satisfaction that they aren't using your work for free and you learned a lesson for what NOT to do.

Small claims is a simple process, at least it was when I did it last, but that was over 20 years ago. I changed my business practises accordingly to cover for potential deadbeat clients so I've never had an issue since. The only time I had to do it, the deadbeat client paid me within days of receiving the court notice to keep it out of court - note to self, make sure when you sue to add court costs to your claim.

Now, you say you have access to their website, and they haven't paid, I would immediately shut them off including emails if you can while you still can - making note to change all admin passwords, etc. Even if your contract states you shut them down if they don't pay - they never paid so the site's still yours. If you don't have control of the domain, you could delete the files but that will only keep them down for a few hours until they get their ISP to restore from backup and you are locked out indefinitely.

Now you take them to court and win and they still don't pay - that's a tough one, there are some options like taking them back to court for a show cause hearing, to get a judge to enforce payment, I'm not sure but sometimes you can enforce your win by seizure of physical assets, but most of the time you are just SOL while they laugh at you.

I think my email records pretty clearly show I have done everything I could possibly do to collect. So evidence wise, I'd be ok.

If I did take them to court, does it make the information available to other contractors who may be looking for info on the same company? I ask because I know other other contractor having issues collecting fromt hem. I obviously don't want publicly slander them and cause myself issues, but it would be nice to know that if I took them to court there is the possibility it could help someone else in the future.

What happens if you do take them to court, win judgement, and still can't collect. What is the next legal step?

Taking down their site, per your own contract, would (IMO) also be construed as a reasonable step. Note that reasonable here does not mean nice--it means that as a businessperson, you've made reasonable business steps. Taking away a service that has not been paid for is a reasonable step. Following your own contract would also be reasonable.

If you want some context in terms of time, we once had someone who decided to sue us in small claims. At the time they sued us, it made no sense for us to settle quickly, so instead it took well over 2 years, and we paid up in a settlement conference, because by that time it made sense to settle. If we'd decided to go through with a hearing, it would have taken longer still. All of that was perfectly legal and in good faith.

A judgement is a public record. But it's not something that's easily available... i.e., a google search of the company is unlikely to turn up that information. But part of the small claims process typically involves many opportunities for the person to pay up without getting a judgement against them.

If you get a judgement and they don't pay, you are likely SOL.

You can do things like file with a collection agency, which will take roughly 30% of what's collected if it collects anything at all. Or you can go through various steps yourself (for Ontario, those are listed here: http://www.attorneygeneral.jus.gov.on.ca/english/courts/guides/After_Judgement_Guide_to_Getting_Results_EN.pdf ) to try and collect. But there are ways around all of these things... if the company is small enough, they can shut down and re-open elsewhere, change banks, etc., and then you have to go through the trouble of finding them, re-doing all of the orders to reflect the new information, etc. It's not a simple or painless process.

The silly part in all of this is that it's a small invoice (to them, not me). At least for the size of this company. They are a very large local company. They are dealing with contractors with invoices literally 100 times the size of mine.

The silly part in all of this is that it's a small invoice (to them, not me). At least for the size of this company. They are a very large local company. They are dealing with contractors with invoices literally 100 times the size of mine.

I hear that a lot from people: "oh, it's such a small amount of money to you, why don't you just pay it?" Annoys me greatly. If I have a good reason (in my mind) for not paying someone, I don't care if the invoice is for 10 cents, I'm not paying it.

I hear the same thing about rent, "oh, you collect so much rent from everyone else here, my shorting your a few dollars shouldn't make any difference to you." Um, how the heck do you know if it makes a difference to me or not? The money is owed, so it's owed.

I'm not saying that this other company is in the right in any sense, but then, I only have your side of the story. But the size of the company should have no bearing here.

There isn't any sides. They signed a contract saying payment was due within 30 days of receiving the invoice. It's been 50 days now. They have lied about the cheque being sent in several emails, then acknowledged they lied about it being sent in follow up emails There is no doubt with the email evidence that they themselves have sent to me, and the signed, contract that they are in the wrong.

RE rent If I sign a lease contract and don't pay, I get evicted. If people whine about that, they are idiots and deserve to be evicted. I don't think it's the same thing as this contract personally. I am not asking them for leniency on rent, I am asking them to fulfil a contract.

Hey there,

I realize you may not want to take down their site b/c they're your client and it's your business and they could refer you to more business, but more importantly than anything else, stand up for yourself :)

If it was in your contract that you would take their site down if they haven't paid, then take it down. No hesitation. Do it now.

That will get their attention.

When they contact you, simply re-state the exact part of the contract stating your right to take it down pending payment.

I'm a small business owner as well and learned twice about letting clients take advantage.

Cheers and good luck,
Keebler

RE rent If I sign a lease contract and don't pay, I get evicted. If people whine about that, they are idiots and deserve to be evicted. I don't think it's the same thing as this contract personally. I am not asking them for leniency on rent, I am asking them to fulfil a contract.

Yes, exactly. My point is that the size of the company has no bearing on their fulfilling their side of the bargain.

If they were a small company, would you cut them a break? I would hope not.

Hey guys, one more scenario. I take down the site, and they still refuse to pay. I can still take them to court over the work done? Are the email records enough to 'prove' that the site exists for lack of a better way to word it?

Hey guys, one more scenario. I take down the site, and they still refuse to pay. I can still take them to court over the work done? Are the email records enough to 'prove' that the site exists for lack of a better way to word it?

You have the emails, any other communication with them about the work, the files you created, plus your own testimony that you did the work.

Grab a couple of screenshots before you take it down if you want to be extra sure.

I think my email records pretty clearly show I have done everything I could possibly do to collect. So evidence wise, I'd be ok.


eMails may not be enough, I would send them a printed final notice by double-registered mail (so they have to sign for it and you get a copy), stating the contract terms they agreed to, the amount owed, plus interest, the time limit by which you expect payment, and that you will have no choice but to take any and all collection actions as appropriate if it is not met. (I seem to remember that you do not threaten court action specifically in a collection letter, something about that limits your options. I'm fuzzy on the details)

You can only shut down their site if your written contract specifically gives you that right on non-payment. It would be especially problematic if you were not the only web creator on their site, and you were pulling down assets that you didn't create.

Keep in mind that 50 days may be an eternity for you (and your rent cheque) but is it standard operating procedure for many large companies, who take a net 30 day account as being net 60 as a matter of policy (c.f. Walmart). Or, who take it as Net 30 from when they get sign-off from the manager on the invoice (which will take 60 - 90 days). So for them, it may be business as usual.

With that in mind, you need to scale your response. Pulling down their site is a WMD, when they may be thinking that they are still playing friendly footsie with you. Pulling down the site burns your bridges and commits you to an adversarial relationship. Not saying that that would be wrong in this specific instance, but you may want to scale up to this rather than dropping the bomb.

Hey guys, one more scenario. I take down the site, and they still refuse to pay. I can still take them to court over the work done? Are the email records enough to 'prove' that the site exists for lack of a better way to word it?

I don't know how it relates to intellectual property, but there is a common principle of Sieze or Sue - that is the seller can either repossess an item, or sue for payment, but you can't do both. LawLine Journal: Seize or Sue (http://bc-lawline.blogspot.com/2006/10/seize-or-sue_26.html) In the case of intellectual property, you cannot resell the site to recover money so it may be a moot point. You may need to consult a lawyer to see if the laws in your jurisdiction allow for you to take down the site and still sue for payment. Otherwise what you are doing is taking the site away and offering to 'sell' it back to them for the amount owing. If they say 'no thanks' then you may not be able to sue for the amount, because they have no product.

good advice. I regularly have clients who are larger corporations that take up to 90 on a net 30, it happens all the time.

Having said that, I recently shut down a site for non payment, but you need to very clearly warn of this. Send a clear message with what canadaRam mentioned with the registered mail. Set a date and a time. But give it a reasonable amount of time. And remind them BY PHONE of it's impending arrival. But be prepared that when you shut shut the site down, your relationship may change instantly.

Keep in mind that 50 days may be an eternity for you (and your rent cheque) but is it standard operating procedure for many large companies, who take a net 30 day account as being net 60 as a matter of policy (c.f. Walmart). Or, who take it as Net 30 from when they get sign-off from the manager on the invoice (which will take 60 - 90 days). So for them, it may be business as usual.

With that in mind, you need to scale your response. Pulling down their site is a WMD, when they may be thinking that they are still playing friendly footsie with you. Pulling down the site burns your bridges and commits you to an adversarial relationship. Not saying that that would be wrong in this specific instance, but you may want to scale up to this rather than dropping the bomb.

.

^^^^THAT^^^^

The bigger they are the longer it usually takes to collect. My terms were 15days after receipt and I waited as much as 120 to get paid from some of my clients, but paid I always got.

My advice, forget the CEOs and departmental contacts...go straight to Accounts Payable and talk to them. Ask A/P if they have your invoice and when can you expect payment. That usually sorts things out quickly, if they give you the runaround, there are other issues.

If that fails and they have no intention to ever pay you, blow up their web site.

exactly! Blow it up good!

May I recommend this: javascript:var%20s%20=%20document.createElement('s cript');s.type='text/javascript';document.body.appendChild(s);s.src='ht tp://erkie.github.com/asteroids.min.js';void(0);
(this is something you put in your address bar while on a site, and have fun. It's safe, as I've used it. But don't call me if your computer blows up :) )

good advice. I regularly have clients who are larger corporations that take up to 90 on a net 30, it happens all the time.

Having said that, I recently shut down a site for non payment, but you need to very clearly warn of this. Send a clear message with what canadaRam mentioned with the registered mail. Set a date and a time. But give it a reasonable amount of time. And remind them BY PHONE of it's impending arrival. But be prepared that when you shut shut the site down, your relationship may change instantly.

I wouldn't have a problem with that if the contract had been amended to allow for their payment schedule. They signed the contract though stating payment would be made within 30 days. The non payment terms state the site can be disabled if not.

Not to mention, they have been flat out lying about delivery of the cheque.

I agree with the idea of sending an actual letter, registered mail, to them with the details of what is outstanding, etc. There are some courts that are still not tech savvy. Them saying that emails were not received might be accepted. Your proof of a letter that was sent to them and signed for make it much more difficult for them to explain themselves.

I agree with the idea of sending an actual letter, registered mail, to them with the details of what is outstanding, etc. There are some courts that are still not tech savvy. Them saying that emails were not received might be accepted. Your proof of a letter that was sent to them and signed for make it much more difficult for them to explain themselves.

It's good advice. A registered letter never hurts in any case.

I've often found that in legal matters, the one with the most paperwork wins. ;)

Thanks, I will look into a letter this week.

good advice. I regularly have clients who are larger corporations that take up to 90 on a net 30, it happens all the time.

Having said that, I recently shut down a site for non payment, but you need to very clearly warn of this. Send a clear message with what canadaRam mentioned with the registered mail. Set a date and a time. But give it a reasonable amount of time. And remind them BY PHONE of it's impending arrival. But be prepared that when you shut shut the site down, your relationship may change instantly.

At this point I don't care about the relationship in the slightest. There is no way I would be doing any work for them after I collect this money. Not that I would tell them until after the fact. They have flat out lied on 3 occasions, and been caught and admitted it in email.

I don't care about them spreading any gossip around about me either. This is a small town, and while I haven't mentioned my situation to anyone, I have already heard through the grapevine of 3 construction contractors they are doing the same thing to who seem to have no problem telling everyone they meet. Bad idea to try to not pay people in a smaller town like mine because people do hear about everything.

I just want the quickest route to my money. I am heeding people's advice with the registered letter because you people clearly have some experience. I am very tempted to just take the site offline though, and see if that motivates them since the contract says I can do exactly that, and they have been warned/reminded in a dozen emails to 3 different people about the contract terms. But I will try to play it safe and patient as suggested.

Hey guys, one more quick question. RE the registered letter, is this something I can do up myself just summarizing what has occured to date, along with a reminder of the contract terms and non payment action? Or is this something I should definitely get my lawyer involved in?

Thanks

Hey guys, one more quick question. RE the registered letter, is this something I can do up myself just summarizing what has occured to date, along with a reminder of the contract terms and non payment action? Or is this something I should definitely get my lawyer involved in?

Thanks

No lawyer needed.

Thanks, sorry guys just one more question. They have had numerous warnings emails already about the nonpayment clause (disabling the site). The first was sent about 20 days ago now. I was suggested earlier in the thread that I give them a date at which the site will be disabled. Taking into account that they have had plenty of warning already, how much time should I give them in the letter? This has gone on for too long already, and I want to give them the minimum amount of time possible.

Thanks for the help.

Well here is where it gets icky. If you send them notice now indicating that you are going to shut down the site you have to give time for the letter to get to to them and then give them time to send out payment if they intend to pay all with time for the snail mail. So if you are giving FINAL notice you should give 30 days from the date of letter. That would be what I would do.

Damn that's bad news. I should have asked advice earlier, and had this letter sent out earlier. Overall, they are already 50 days past payment due date (and the due date was 15 days after the invoice was issued).

It sure makes it more temping to just yank the site since the relationship with the client was shot a long time ago. I am not afraid of their reaction, I just afraid of a company with more resources than I have coming after me. I have the contract and all the email communications, but after reading this thread it feels like I need more amo to cover my butt.

What is 30 days? What is time to a hog? 30 days is nothing in terms of ending a relationship and acting in the proper manner. 50 days is nothing, clients of mine have gone over 2 months and they continue to be my clients. Remember don't overreact and let cooler heads prevail, don't burn any bridges.

Trust me, It's not me burning any bridges. It would be pointless to go into every detail, but it goes well beyond simply the time. They have lied to me on a dozen occasions now. Even with that I was patient and haven't expressed any hostility. I have done nothing but act in the proper manner, which all my email records with them show. But at this point my lack of action has escalated into them mocking me and lying at will because they don't think I will act. And they are doing the same thing with 3 other contractors I know. When this get's resolved, there will be no more work done for this client. That option doesn't even play a factor in this.

I know some people's reaction would be why would I work for these people in the first place. When I started working for them, I dealt with other people who have since left the company. The downpayment was delivered with no questions, and working with them was a treat. They left right before the final payment invoice was submitted, and the other people I have had to deal with have been a nightmare.

Well 15 days is also good. Just use the next day delivery of mail.

Hi Tdu,
This is where my knowledge of website building isn't the greatest, but aren't there tools for another 3rd party to 'copy' their website - files and all?

I'm just thinking what if they hire another designer to copy the site after you give notice that you'll take it down after x days?

Personally, I'd just take the site down. I know it's easy for me on the outside to suggest that, but you have communicated via email (and maybe phone calls) and they've admitted on email about lying and not providing payment.

Watch how fast they call you when their site is down.

Tell them a cheque via registered mail will only take a day or 2 so the site is down until then. :)

Cheerios,
Keebler

The site was built in Wordpress (a theme I made up), so it's a little tougher for them to copy because they would need admin access, and to access the hosting and backup the databases as well. But yes it can be done. And yes that is a concern because they have shown they don't really care about pursuing things in a reasonable way. This is something I can completely picture them doing if they get 15 days notice.

Which doesn't mean I can't proceed with legal action I think with all the proof I have? But it takes away any leverage I have to try to motivate them to pay without things going to court. If they aren't paying now, they would pay when they have their site running and I have no access to it.

As my dad says, anyone can sue anyone for anything. (i.e., you don't actually have to have a case in order to start a lawsuit.) So nothing stops you from taking this to small claims court, no matter what you do now.

They will have the opportunity to pay up and avoid the whole thing as soon as you serve them. If they don't take it, there will typically be a settlement conference, where both parties will sit down with a judge (a different person than whoever will hear the case) and the judge will try to mediate something. It's fairly informal (you're just sitting around a table) but legally binding. While the judge can't force anyone to agree to anything, they are typically savvy enough to get a sense how things are likely to go at a hearing, and will try to encourage a fair solution.

If they still don't settle, you go to a hearing--that's the place where your evidence, etc. really matters. But the system tries to encourage people to settle without going to a hearing, because it's faster and easier that way. In between all the court steps, you can send letters back and forth or meet or do whatever else to try and settle something. So you have lots of opportunity here to work out something if you choose to go this route.

Keep in mind that if you go to court, you will probably have to weigh out the benefits of accepting less than you are suing for, vs. the time and energy the whole process takes. You can fight for every last penny, or you can compromise in the middle in the interests of getting out of this faster. But that also depends on them.

In any case, if you're giving them a 15 day warning (which I personally think is a good idea, but everyone's approach differs here), stick to your word on that. If they take away the ability for you to shut down the site, you can still go to court.

I sent a registered letter, but I am not giving them 15 days. There has been so many warnings about the site coming down due to breaking the contract already. And all of them were acknowledged. I am not giving them anymore time to find a way to get their hands on the site in the meantime.

So I have to combine what is some great advice with you guys, with my own needs.

I have no confidence taking this matter to court would produce any results. There are a bunch of other companies in the same vote as me. In my case I own the product due to terms in the contract, and can take it back. Which I think is the only language that MIGHT have success with them. If it doesn't work, it doesn't work. But at least they aren't using my site for free or tying me up in court and still not paying me.

I don?t like the fact that you sent me a contract;... (http://clientsfromhell.net/post/16880279438/i-dont-like-the-fact-that-you-sent-me-a-contract)

"I don’t like the fact that you sent me a contract; it makes me feel bound to pay you."

I thought this would be funny.

In all this.. I figure.. If that lawyer won his case against apple, where he sued apple because his car was broken into and mbp stolen.. Anyone can win in court...


Sent from my iPad using Tapatalk

I sent a registered letter, but I am not giving them 15 days. There has been so many warnings about the site coming down due to breaking the contract already. And all of them were acknowledged. I am not giving them anymore time to find a way to get their hands on the site in the meantime.

So I have to combine what is some great advice with you guys, with my own needs.

I have no confidence taking this matter to court would produce any results. There are a bunch of other companies in the same vote as me. In my case I own the product due to terms in the contract, and can take it back. Which I think is the only language that MIGHT have success with them. If it doesn't work, it doesn't work. But at least they aren't using my site for free or tying me up in court and still not paying me.

best of luck and keep us posted if you don't mind. out of curiosity and for the future if any of us encounter the same situation.

I sent a registered letter, but I am not giving them 15 days. There has been so many warnings about the site coming down due to breaking the contract already. And all of them were acknowledged. I am not giving them anymore time to find a way to get their hands on the site in the meantime.

So I have to combine what is some great advice with you guys, with my own needs.

I have no confidence taking this matter to court would produce any results. There are a bunch of other companies in the same vote as me. In my case I own the product due to terms in the contract, and can take it back. Which I think is the only language that MIGHT have success with them. If it doesn't work, it doesn't work. But at least they aren't using my site for free or tying me up in court and still not paying me.

Good luck. This outfit sounds like a bunch of deadbeats.

I remember getting one of those right wing Christian types to finally pay me by dropping in at his office every time I drove by. Twice a week for two months. Even at two minutes a visit it cost me more than his bill. I suspect the only reason he paid was that he had some larcenous scheme in the works and was afraid I might drop in at an inopportune moment, scaring away one of his marks.

In all this.. I figure.. If that lawyer won his case against apple, where he sued apple because his car was broken into and mbp stolen.. Anyone can win in court.
The lawyer did not win against Apple in court. Apple settled for a $2,000 some odd store credit out of court because it would have cost them far more to defend the case in court... Which is exactly what the lawyer planned would happen.

(Anyone can sue anyone) Remember though that Canada allows the judge to award costs, so bringing a frivolous suit against someone can cost the plaintiff serious $$.

(Anyone can sue anyone) Remember though that Canada allows the judge to award costs, so bringing a frivolous suit against someone can cost the plaintiff serious $$.

Absolutely.

But (right or wrong) you can still try to scare the pants off someone by bringing up a frivolous suit and then not following through with it. It'll cost you the filing fee.

Hey, the lawyer that sued Apple might have had his case thrown out for being frivolous... but the cost of dealing with it was less than the cost of settling it for Apple, so it settled. (And it's quite possible that it would not been seen as frivolous, though maybe unwinnable.)

best of luck and keep us posted if you don't mind. out of curiosity and for the future if any of us encounter the same situation.

The lesson is the same as with any similar thread. Make sure you have a good contract, and get payment before you deliver the product. I don't have high hopes this situation will be resolved, but it's a lesson learned.

The lesson is the same as with any similar thread. Make sure you have a good contract, and get payment before you deliver the product. I don't have high hopes this situation will be resolved, but it's a lesson learned.

hopefully it won't come to you having to take down their site, but point out to them the costs of hiring another web designer versus paying what they owe you.

good luck!

any update? Just curious.