Self-employed... won't be paid until client is paid

[Bruno123]

Hi… I’ve made a big mistake, can anyone offer advice please?
I'm an IT contractor and took on a short contract with a small consultancy firm, who in turn are working for a larger client. I read and was happy with the contract, I’d be paid within a week of submitting my invoices. I agreed via email. They then sent it again for electronic signature, I checked again and signed. All good.
It was then withdrawn and I had an email “oh, there was an issue at our end, can you sign again”… this is where I made the mistake of not reading it in full for a third time, but skimmed, then signed. They’d substituted the clause of 7-day payment with “I will get paid within 30 days of THEM receiving payment from THEIR client”
This has only just come to light because (of course) I’ve not been paid and have only just realised what's happened.
So, my question isn’t “how do I get out of it” because I know I can’t. It was sneaky of them not to say they’d changed the contract instead of making it sound like nothing, but my fault for not reading properly.
The question is – can you ever legally chase payment when you’re in this situation? I think it’s a get-out clause to never pay me, of course, but is there any way to deal with it? How can I ever prove they've been paid by their client, or do I just write it off?
I would never normally work to a "you're paid when they're paid" type of contract and am aware this is my fault and a hard lesson learned. However, any advice would be welcomed. Thank you.

[Manxman]

Do you have a proper paper or email trail showing all the correspondence and how the contrcats differ?

If you have I would argue that you are the victim of a unilateral mistake (on your part) which ahs been caused by them changing the wording of the contract withput telling you. You could even argue that they had acted in bad faith by simply asking for confirmation by your electronic signature and not putting you on notice that they'd changed the wording.

I'm not a lawyer and this isn't legal advice, but if you've got a paper trail I'd argue the toss with them and if they don't pay up I'd sue them under the terms of the original contrcat that you had agreed to.

Obviously you'd be burning your bridges as far as ever working for them again...

[PallasAthena]

Can you give us sone idea about timescales here. How long ago did you invoice your client? What are they telling you about when they expect to receive payment from their principal?

How much money are we talking about (approximately, not exact amount)?

[tesla6518]

Does your contract include a variation clause? if it does they are allowed to change your terms, but they must notify you

[atticus]

For the benefit of both Bruno123 and tesla6518, that kind of variation clause is unlikely to be upheld as justifying such a substantial change to the terms.

I agree with Manxman .

@Bruno123: do you have any work product you can withhold? What leverage do you have, if any?

[tesla6518]

Hi Atticus, I am aware of that but it was just to see if that was what the company were relying on. Obviously this is not an employment contract but a Contract to supply services. I would venture that this would be a breach of contract, but unless the contract is seen, we are flying blind.

[Bruno123]

Hi, thank you all very much for your responses. I can’t post the actual contract for confidentiality reasons, obviously, but yes, I have a full (electronic) paper trail of everything, and the lack of notification of a change.

It was only a 2-month contract from early April until the end of May, but with a monthly invoicing frequency, i.e. I could invoice at the end of April for that month’s work, then again in May. I didn’t have to wait until it was all finished before I sent my bill.

So I submitted a timesheet, as per their process, detailing the work I’d done - that took a week for them to sign before I had to chase for that!!!! Anyway, they eventually did, so I invoiced. When it hadn’t been paid after 9 days (and I believed my terms were 7) I contacted them and asked for payment, they then quoted the “30 day pay-when-paid” clause and it all unravelled from there. So currently, they owe me for April, but May is yet to be invoiced. Thankfully this was not a full time contract so it’s only a few thousand, not tens of thousands.

I don’t have work I can withhold, but even if I did, the contract has all manner of clauses that my work is their property (or legal terms to that effect) so I would be in breach of contract if I did. I’m not sure I actually have any leverage at all.

I’m not sure about a variation clause, I’d have to check for any wording like that, but it doesn’t ring a bell. I don’t recall any terms saying changes would have to be notified. I can tell you there’s a clause (in both the original and new contract) which says the one I’ve signed replaces all others to date. Any they didn’t “sign” the first one, only I did. They then withdrew it and sent the “oh sorry can you sign it again, something went wrong when signing here” email… so I signed again, as did they.

As for when they expect payment from their client…. they’re not saying. I asked in the email exchange when all this took place on Friday and it’s not been answered. I called, it went to voicemail (left a message), they’ve not phoned back.
Friday’s to-in and fro-ing took place with someone I’ve not met who works for the firm - my next plan will be to get to the end of the month (can’t quit as it’s five day’s notice, which is the end of the month anyway), do as little as I can get away with (can’t refuse to work, produce substandard or withhold work, as that would breach my contract), get the timesheet in for May (chase it, probably), then send the final invoice and request again information regarding their payment terms with their client. I’ll go the MD (my original contact) for that.

I have no concerns that their client will pay… again, I can’t say who, for confidentiality, but they’re a massive organisation. Could easily be 90 days though. My concern is that the small firm will just continually state they’ve not been paid, when I chase them. I’ve no experience of taking anything to court but I assume that would be my only recourse.

Thank you all for reading and taking the time to reply, it’s much appreciated.

[Bruno123]

Manxman Oh, I forgot to say, as far as burning my bridges with them…. that’s not a problem!!! I wouldn’t want to work for them ever again, after this.

[Huxie]

Ignore FATELOG, they’re a spammer and have been reported.

[Bruno123]

Huxie Thank you… these spammers get everywhere :-(

[atticus]

Any news on payment?

[Bruno123]

Any news on payment?

Actually yes… sort of! I’ve actually just logged in to ask a question, if I may, please?
To update the story, I finished the contract (luckily didn’t have to do too much more work, but I fulfilled my part of the contract, at least), submitted my timesheet and once approved, submitted my final invoice. I then chased again (and again) to find out their payment terms with their client.
After hearing nothing for a while, they randomly replied to my emails and said despite only being legally obliged to pay me when they’re paid, they’d consider me a ‘special case’ and would pay me by the end of June.
This was unexpected, and not what I was actually asking for, but I was happy to hear it!!! However, the end of June came and went and they didn’t pay me. I’ve chased again… no reply….
So - my question is - does that email carry any legal weight at all? It specifically says they would pay me by the end of June… but of course the contract doesn’t say that. As I STILL don’t know their payment terms with their client, I don’t know when it’s worth chasing them on that basis, but does that email help me?
Many thanks everyone.

[atticus]

On what you say, I do not think that you can rely on that email as having any contractual weight.

Have your communications been with a top level executive e.g. Managing Director or Finance Director?

[Bruno123]

atticus Thanks, that’s a shame but probably what I expected. My original contact is the MD, and although I’ve directed most of my contact towards him, he’s not replied and the messages (including the “we’ll pay you in June”) have come from the Operations Manager.
My business insurance includes legal expenses up to £100k and covers non payment of debts…. but I worry that if I pursue legal action, something may happen and my insurance won’t cover it, and I’ve lost not only the money I’m owed but end up with legal debts too! Without insurance, can anyone give me even a rough ballpark figure of how much it might cost to pursue this, please? I’m owed £5k, will I lose it all in legal fees?
Thank you.

[atticus]

A claim under £10,000 will be dealt with by the County Court in the Small Claims Track. You can represent yourself, without needing to engage or pay for lawyers; indeed, the loser will not be ordered to pay the winner's lawyers' fees. This minimises your risk should you not be successful.

All you will pay will be court fees. These are presently £455 to start a claim for £5,000 and a hearing fee of £346. If you win your case you can expect these amounts to be added to the sum the defendant is ordered to pay you.

Have you actually asked your legal expenses insurers?