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I've been threatened with legal action for a non-disclosed penalty payment!

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  • I've been threatened with legal action for a non-disclosed penalty payment!


    Apologies for the length of this but I could really do with some advice.

    ​I am in a situation and need to know where I stand from a legal perspective. I run my own business and in May I paid a non-refundable deposit for a service provided by Andrew. The service was due to start later this year. Following this, Andrew offered me a place on an excursion for £1500. This price was discussed via email/messaging. The invoice link was sent to me from his bank confirming the price, and this was paid.

    Andrew sent me a contract for the product purchase late on a Sunday evening in June which was the night before the excursion, and a few weeks after the deposit had been paid. This was obviously after flights, hotels, and other costs had been paid based on the original excursion price, and didn't give me sufficient time to read the contract before departing.

    I then went on the excursion but afterwards decided not to proceed with the full purchase of Andrewís service. I confirmed this in writing with Andrew and accepted that the deposit would not be refunded. Andrew responded saying that due to my not completing the purchase, I would have to pay the full price for the excursion which was considerably higher (about £3000). This additional premium had not been mentioned at all prior to this moment. I confirmed with Andrew that at no point he had mentioned the full price. He responded saying that this was detailed in the (unsigned) contract and also on the invoice link. I checked the invoice link and the description on the invoice had been amended to include a section detailing the additional premium owed should the full product purchase not be completed. I have an invoice screenshot I took the day before which didnít have any of this additional information, so it appears they have changed it after payment was agreed and completed in order to make me pay the additional. I have spoken to the bank in question and although the agent could not see the exact amendment, they confirmed that something wasnít right and I was urged to send the details to their fraud investigation team.

    I just want this whole thing to go away. I donít want to be involved in any fraud investigation (Andrew will almost certainly face huge difficulties if his account is suspended pending investigations) but I am extremely disappointed by the whole situation and it is causing massive amounts of stress. I do not believe I am liable to pay any more than what was agreed, I have not signed any contracts, and I am very unhappy that the terms of the invoice have been amended (to suit their story) which I assume must be illegal/fraudulent. I've not been involved in this industry for long and I feel Andrew is essentially bullying me as he knows I am inexperienced, particularly in this situation.

    Andrew has apparently obtained legal advice and has threatened to take me to court if the balance isn't paid. I can't see how he can enforce the additional undisclosed payment when no contract had been signed or even verbally agreed, and the amended invoice just feels wrong.

    I have contacted citizens advice and they have advised me to send him a letter based on misrepresentation/ false statement of fact prior to any further action from Andrew. As mentioned, I have no experience here and just want it to end!

    My main concern is whether the contract is enforceable? The only T&C's agreed/disclosed is the non refundable deposit which is fair enough. There was no hint of any further penalties or payments of any kind should I not proceed to purchase.

    Thank you

    Tags: None

  • #2

    First of all, you have two options, either pay up or defend your position. You've said you want this to all go away so if you are worried about it escalating to legal proceedings, then you really need to pay Andrew and be done with it.

    Assuming you may want to defend any claim, there seems to be some missing key information so are you able to confirm whether the excursion was in connection with your business or were you acting in the capacity as a consumer? Payments from your business bank account would be indicative of the excursion being a business to business contract as opposed to business to consumer.

    Also, when you say you paid a deposit for the excursion, was that deposit £1,500 or a portion of that amount? Have you since paid the £1,500 or is a sum of that amount still outstanding?

    It would appear that you may have good grounds for arguing that the terms and conditions of the contract are not legally binding. It sounds like the exchange of emails you had with Andrew together with the deposit, formed the contract for the excursion. It is a well known principle of contract law that you should be given adequate notice of any terms or conditions that form part of the contract. If someone tries to incorporate terms after the contract has been concluded, then they will not be legally binding unless the other person agrees to them or the existing terms allows the party to unilaterally vary the contract.

    Given that the contract was sent to you a few weeks after those initial discussions and the deposit paid, and together with the fact that you never signed the terms would indicate that you never agreed to them and as such the terms and conditions Andrew sent over were not incorporated into the excursion contract. If what I have stated is correct, then I think Andrew would highly likely lose any legal proceedings.

    That said, the devil is in the detail and those email exchanges will be crucial as to whether or not Andrew made reference to the contract terms and conditions which could mean that they were incorporated by reference.

    Has Andrew sent a letter before claim or has he merely indicated that he has taken legal advice and will take you to court if you do not pay up?


    • #3
      Thank you for the response. To clarify those points:

      The excursion was in connection with the business. Apparently the contract states that the lower price was based on completing and continuing with the purchase of the service, otherwise the full balance would be owed.

      The excursion balance was paid in full, the deposit was for the purchase of the service.

      My position is essentially that I am refusing to pay the additional balance as this was not disclosed or agreed. The contract was sent extremely late and well after the prices had been confirmed and paid, meaning sufficient notice of the terms and conditions wasn't given. The amended invoice should not be enforceable as it was amended after it was agreed and paid, and after the excursion itself. I believe I may have grounds for a counter claim for misrepresentation but I'm not clear on that and as mentioned I would rather it all just went away.

      Thanks again for the help.


      • #4
        Unless he can show that the additional terms had been incorporated by reference in the email correspondence, I think he will be chancing his arm and there are very good prospects of you successfully defending any claim that he might bring.

        A well drafted, robust and assertive response to Andrew should be enough to bat this away and if you mention that should a claim be issued, you will counterclaim for misrepresentation then it may make him think twice and leave it at that. Unfortunately there is no guarantee that he will listen to you so you could very well still be landed with a claim and you will need to decide what you want to do from there.

        Feel free to post up any draft response for feedback.


        • #5
          Thank you for the reply. Apologies for the delayed response, it had all gone very quiet and I had tried to put it to the back of my mind. Andrew is involved in some similar disputes with other clients who were in a signed contract with him. One has since settled while the other was let out of the contract having paid the £1500 penalty fee (he tried to enforce full payment of the contract but backed down when the penalty was paid).

          Today I received a letter from a law firm demanding payment, along with a copy of the unsigned contract. There are various inaccuracies (for example, the sums confirming what was paid and what is outstanding are both wrong). I feel that the full story has not been told to the law firm - should I reply to them with the correct information and the time line of events?

          The background section within the letter states clearly:

          You were invoiced for the programme and bonus retreat and made a payment of £1000. You were also issued our terms and conditions on 18th June which you failed to sign.

          You attended the retreat from 19th June to 24th June.

          We are instructed that demands for payment of the arrears were made of you in writing by an email dated 26th June on behalf of the company.

          The main issues here are that I was invoiced for the bonus retreat only (as previously mentioned this invoice was amended on or around 25th June), and I paid more than £1000, so this is wrong. It also clearly shows that the contract was sent a day (literally 12 hours) before the flight and outside of working hours, which cannot be seen as adequate notice. There was no reference to this in any prior correspondence.
          The letter also states that should this escalate and they obtain judgement for the recovery, the costs could double or triple.

          In the meantime I have documented evidence of him making slanderous statements about me to a client of mine! Luckily I am on very good terms with this client and it should not impact our existing contract. He has also made is clear to others that he is in a legal dispute with me, which I assume should be confidential and potentially damaging to my reputation.
          I'm genuinely surprised that it has got to this point but he appears to be holding a grudge for no apparent reason.

          Thanks again for any additional advice you can provide, you have no idea how much it is appreciated!


          • #6
            Originally posted by JamesT View Post
            The letter also states that should this escalate and they obtain judgement for the recovery, the costs could double or triple.
            Unless I have missed something here the amount they would sue for is about £1,500 + court fees and interest. The maximum contract value mentioned is £3,000. So it would be in the small claims track where the claimant wouldn't be able to recover his solicitor's fees even if he won. I suppose it depends what they mean by "escalate".
            All opinions expressed are based on my personal experience. I am not a lawyer and do not hold any legal qualifications.


            • #7
              check that the 'law firm' is a solicitor firm


              • #8
                The "law firm" in question is Fresh Law Ltd (www.freshlaw.co.uk), who are not on the SRA register (neither is the sole director). According to the website they are for people that can't afford or don't want a solicitor, so I'm not quite sure what they actually are!


                • #9
                  Then this may very well be in play!



                  • #10
                    They are on the PPR https://ppr.org.uk/item/i208833/

                    Does that change anything?


                    • #11
                      Answer - no


                      • #12
                        "The letter also states that should this escalate and they obtain judgement for the recovery, the costs could double or triple."

                        Please post up a suitably redacted copy of that letter.


                        • #13
                          Originally posted by efpom View Post
                          "The letter also states that should this escalate and they obtain judgement for the recovery, the costs could double or triple."

                          Please post up a suitably redacted copy of that letter.
                          This is the section in question

                          Click image for larger version

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                          • #14
                            Your first post was very vague.

                            I think that to get objective views from contributors on your situation you will need to provide much more detailed information about the dispute - the reference to an under-lease and arrears in the snippet you posted up, seems to indicate some sort of real property dispute.

                            Having said that, and whilst a judgment may be made against you, if the claim is allocated to the small claims track, absent unreasonable conduct by you as defendant, solicitor or barrister representation costs are not recoverable.

                            HOWEVER - there are two other ways in which losses may be recovered:
                            a)If the dispute relates to a contract that contains a clause stating that the defendant would be liable for costs resulting from his breach of contract, then those costs can be claimed.
                            b) Statutory costs in business-to-business disputes the Late Payments Act

                            That may explain the size of the costs described in the snippet.

                            One further point - it is better, much better, to post up the entirety of documents, rather than snippets -


                            • #15
                              Thanks again for the advice given so far. I have prepared a letter as a response to the letter from the paralegal which I hope will put an end to this. While dates and figures may be slightly different to what has been mentioned (this was simply an attempt to avoid the situation being recognised by the part involved) the situation itself is described with 100% facts:

                              I am writing regarding the case involving myself and your client, [REDACTED], to ensure that your firm is fully informed of the situation, which I believe may not have been adequately communicated by your client.

                              I think I should make it clear from the outset that I have no intention of paying the £2000.00 you have demanded and do not accept that you have the legal right to do .

                              I do not believe it to be in either of our interests that the matter should become the subject of legal proceedings but, anticipating that this may be the case, I have taken appropriate advice .

                              I now have this and it informs me that should the matter go that far, the Court would almost certainly reject your claim.

                              On [DATE] I paid a holding deposit of £250.00 to your client to secure the coaching price. However, it was agreed by your client that I could withdraw from the program before confirming the start date in September. While your client indicated that I would not receive a refund, I was advised that I could apply this amount toward any other products or services.

                              Your client then offered me a place on the [RETREAT/EXCURSION]. When I booked the retreat, I was not informed that it was a service associated with the [SERVICE/COACHING MASTERMIND]. I have evidence of my inquiry regarding the price, as the sales page had been removed, and your client informed me that the price was £1500.00, which I can substantiate. There was no mention at any point that this was a discounted rate tied to the mastermind with accompanying terms and conditions. I was provided a payment link for £1500.00, not the £1400.00 stated in your initial letter, and this link had no terms or conditions attached. This sum was paid 4th July 2023.

                              The contract for the [SERVICE] was emailed to me on Sunday 18th June 2023 at 17:56. I departed for the retreat at 7am the following morning (19th June 2023), leaving me without the adequate opportunity to review any terms or conditions or sign the contract. Hence, I was not aware of the connection between the services or any terms and conditions.

                              I returned from the retreat On Saturday 24th June 2023, and on Monday 26th July 2023 I expressed my decision not to sign up for further services with your client. To my surprise, your client revisited the original invoice through Stripe and amended it, adding terms and conditions including the additional payment that would be required should I not proceed with the coaching mastermind. When I queried this, your client confirmed this amendment via a voice note. I have since reported this invoice amendment to Stripe for investigation by their fraud team.

                              Since the retreat, I have evidence of your client making others aware of our situation and even engaging in defamation of character by approaching one of my clients and making disparaging comments about me. I have documented these incidents as evidence, which could have led to significant financial loss on my part. Additionally, I have received voice messages from your client that caused me emotional distress, resulting in my need for hypnotherapy and the prescription of anti-depressants.

                              Regarding the court costs mentioned, legal costs must be reasonable. Given that the disputed amount falls between £1,500.01 and £3,000, small claims court fees are £115. The estimated costs of £3,000 to £4,500, plus VAT and expenses, do not appear proportionate to the amount your client claims I owe.

                              The core issue here is that I was never informed of the connection between these services or provided with adequate notice of the associated terms and conditions. Entering into a contract necessitates reasonable notice of terms, and I believe you would concur that 13 hours does not meet that standard.

                              Furthermore, I wish to notify you that I will not be making any further payments to your client beyond the total of £1750.00 that I have already paid. I have meticulously documented all the evidence I have and am prepared should your client choose to pursue this matter in small claims court.

                              I'm hoping his "legal team" will advise him that this is simply not worth pursuing and we can put this to bed!


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