Advice Needed Re: Contract Issue

[airborne]

Advice needed re: Contract issue

re:rights concerning suspending training

Dear Forum,

Can anyone supply me with quality information concerning an issue of non-payment of an invoice, and my rights to suspending training services until payment is made?

Alternatively, is there any other suggested courses of action that are non-legal, but effective?

Issue;

I currently supply English language training services to a Company in Chonburi province, which began in August 2004, for a total of 400 hrs.

The first and second invoices were paid with no problems or delays, however the current invoice that was due to be paid on 4th January 2005, was presented to the company at the same time as the second invoice at their request, in October 2004.

January 4th came and went without payment or reason, until i enquired if there was a problem.They resonded that they did not want to pay until February 2005.

At no time prior to January 4th was it indicated that they would not pay on the mutually agreed date, which would have been somewhat more acceptable.

We do have a signed,dated and stamped contract for services, with the clause : All tuition charges are to be paid in full (agreed amount) on the agreed date and highlighted.However the payment dates of the invoices was orally agreed.

What courses of action are effective, reasonable and acceptable without requiring the services of legal counsel?

Any quality advice would be gratefully received.

My thanks in advance,

Airborne

[Sumitr Man]

3 questions:

1: does your contract have a provision as to what would happen if the payment was not made?

2: does your invoice say words to the effect that payment is required to be made within [14/28] days of the date hereof, or else we reserve the right to suspend services?

3: how many hours of the 400 hours have been completed by Feb, 2005? less or more than half (I assume more than half, but I could be wrong).

SM

Edited January 11, 2005 by Sumitr Man

[ProThaiExpat]

Many questions need be answered to give a definitive answer, but winging it, your talking about a breach of contract issue.

Assuming that payment was to be after performance of each segment of the contract and that the contract was not loosely written so one could interpret it to mean the entire contract was to be performed with partial payment of the total agreed upon to be made during the pendency of the contract, one might interepret the contract to be in parts and that failure to pay for one part of the total, when called for in the contract to be paid, is a breach of the contract.

If in fact a breach of the contract has occurred, then you have the right and the obligation to mitigate your damages by not performing additional services which would only increase the amount in default.

The wording in a contract is most important, as it should express the intent of the parties at the time of signing. Was it a whole contract for the entire time with partial payments of the total price or was it in fact, a contract running over time but with definite segments and periodic payment due for each segment?

[GuestHouse]

You might teach their customer relations and sales staff some 'Colourfull Greetings' and inform them that these should be used when ever talking to people in senior positions as a mark of respect.

[Sumitr Man]

The problem that you need to keep in mind is that you may be in breach of contract if you did suspend services at this time. It's difficult to know if this would be the case without knowing more details.

If you need to take immediate action, you may consider sending notice via registered mail that the company has x number of days in which to pay you or else you'll consider them in breach of contract. However, just be careful to make sure that you stay within the limits of your contract.

But, regardless the BS of Thai law, fact remains that litigation in Thailand is hardly the worth the effort. Why not talk nicely with the person who signed the contract. If you need the money now, explain this to them. You never know, it may be the quickest/easiest way to solve the problem

[Indo-Siam]

Hi -

My comments reflect my opinion, and not necessarily hard fact.

You have almost no legal recourse to recover your receivable. I have been to Thai court (labor court, as losing defendant) - their approach is conciliatory - as long as the party who owes indicates an eventual intention to pay the debt, over time, the court forces this solution upon the person who is owed money. Getting to court involves service of a summons - which basically sets a court date months in the future. So - forget legal action.

As far as your obligation to perform further - you have none. Just make sure you document that you have advised them that you are unable to deliver further instruction, until payment is made for past instruction. Send them this notice, politely, in a Thai language letter. This makes you effectively bulletproof.

Now - realistically, if you ever want to see payment, you have to play along with them - at least to some degree. If you default at this point, your chance of ever being paid goes to near-zero.

Things to consider:

1) If the company pays annual bonus, this is either paid at calendar year-end, or at Chinese New Year (early February). If company is having cash-flow issues, they may choose to defer paying you, in order to make annual bonus payments. This hurts you, but may be necessary to "save face".

2) I can assure you that all Thai companies that run close to break-even have trouble collecting accounts receivable at December month-end - and this results in difficulty paying January bills. This is normally a short-lived problem, but - based on the "food chain" concept - it affects many companies.

My suggestion - live with the situation. You will most likely be paid in February. Go ahead and ask them for partial payment now - even 25% of total. Do not cut them off. But - go with your instincts. It sounds like they are having problems - so you need to conjur up at least a modicum of empathy.

Lesson learned: Companies, and individuals - tend to remember who stuck with them when the chops were down. Fair-weather friends are plentiful - friends (or vendors) who stand by you when times are tough tend to earn a special place in the future. This may not apply - if you are dealing with crooks - but that is for you to determine.

Good luck!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

[airborne]

3 questions:

1: does your contract have a provision as to what would happen if the payment was not made?

2: does your invoice say words to the effect that payment is required to be made within [14/28] days of the date hereof, or else we reserve the right to suspend services?

3: how many hours of the 400 hours have been completed by Feb, 2005? less or more than half (I assume more than half, but I could be wrong).

SM 

<{POST_SNAPBACK}>

Hi Sumitr Man, let me deal with the questions in order;

1 and 2.The contract did not have the provision in writing, but was agreed to verbally.

3.Approximately 320 hrs would have been completed.

[Sumitr Man]

Based on your response (which basically means it is your word against theirs - and would rely on some form of verbal amendment to a written contract - *tough to prove*), I think the advice Steve gave to you earlier is by far the most practical so far given. Theory may say different, but for the reality of seeing cold cash in your pocket - you could do a lot worse than what Steve recommended.

SM

Edited January 12, 2005 by Sumitr Man