Re: Client Won't Pay

Subject: Re: Client Won't Pay
From: Martha Cosgriff <mcosgriff -at- TELE-TV -dot- COM>
Date: Thu, 24 Oct 1996 12:36:23 -0400

In the US, typically a contractor works one of two ways:

1. Independently-- he contracts directly with the client and signs a
contract usually generated by the client's lawyers. This contract
invariably contains a clause assigning all patent and copyright rights
from work performed on the contract to the client.

2. Job Shop--a contractor acts as a subcontractor through a technical
job shop, and in this case, signs the contract with the job shop for
the job to be performed for the client. This job-shop contract also
invariably contains a clause assigning all copyrights and patents from
work performed on the job to the client.

If the client doesn't pay the direct contractor, there still is little
recourse re: the patent rights, because it usually isn't difficult for
the client to prove that work on the patentable/copyrightable issues
occurred in one form or another before the arrival of the contractor.

So your claiming copyrights or patent rights would not usually be a
threat to the non-paying client.

Also: not every jurisdiction in the US has a Small Claims Court. In
some places you just gotta see a lawyer.

Another note: Some project managers sign for services/goods when they
know very well they aren't supposed to. And, some sign in ignorance.
The best advice is for the contractor to check with the CFO of the
prospective company to see just who can, and who cannot, authorize
payment. That'll take care of that problem.

You can also advise them that you will be paid weekly, and your
invoices should reflect this: e.g.., "Terms: Net 7 days."

However, many companies' contracts have a clause stating unequivocally
that they will NOT pay before 30 days, and if you want the job, you
have to renegotiate this (not easy, since their accounting is not set
up to accommodate it) or put up and shut up. And wait.

If the company you are contracting with is a federal contractor, there
are some legal cures, especially if it is a defense contractor. All
you have to do is find the program manager on the government side and
complain about it. Chances are you'll get your money fast that way!

Regards,
M.


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