Here at The Debt Collection Centre (TDCC) we know that properly drafted terms and conditions are not only important but can bolster your negotiating position in the event that your invoices are unpaid or are disputed.
If a Debtor does not pay and you are forced to issue Court proceedings your terms and conditions can significantly strengthen your position.
For example, if you commence proceedings and the value of the claim is less than £10,000 (the small claims court threshold), this means that the Court does not ordinarily award you all your legal costs even if you win. You may recover what are known as fixed costs but these are often minimal compared to what you have actually spent. More often than not you can find yourself out of pocket or throwing “good money after bad” in seeking recovery of monies due to you.
However, if your terms and conditions allow for the recovery of reasonable legal costs then providing those terms have been properly incorporated into your contract and dealings with your customer then you will be in a position to argue that you are contractually entitled to your costs. Proper terms can strengthen your position.
We at TDCC appreciate that from a commercial and practical perspective you may not always wish to enforce this type of contractual entitlement with your customer. This largely depends, in our experience, on the relationship that you have with that customer and the previous course of dealings and income stream that that customer produces. However, it is useful to have terms such as this and for interest for late payment in the “back pocket” should you find yourself engaged in a dispute about an invoice or its late payment. Late payments can significantly affect businesses cash flow and it is important therefore to ensure that if you need to recover a debt the cards are stacked in your favour as much as possible.
As solicitors we can review and if necessary amend your terms and conditions to afford your business the best negotiating position possible if your invoices are not being paid. For further information please contact one of TDCC Team.