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There can be nothing worse than slaving away for a new or existing client and
not to get paid for it. There are a lot of bad apples on the internet, and it
can be quite difficult to legally force a payment, especially if your client is
located in another country. But even if located in the same country, hiring a
lawyer and dishing out all the fees to chase payment can be too expensive to
make it worth your while. Below are some tips indicating what
we have learned over the years to help make sure we got paid for our excellent
work.
One of the best ways to ensure payment is to do a good job, which you can learn how to best accomplish through our translation tips page. By providing excellent work there is a greater chance your customer will want to use you again, so it will be within its interest to pay you in a prompt and reliable manner. A second approach is to take the time to research your customer. You can try to find their tax records with the government to see if they are solvent, or find out what other translators say about them through various forums, the most prominent of which you will find through the payment reputation and practices page. Another option is to ask for a PO (purchase order) and or binding contract, but over the years we have found that these tend not to have any clout across international borders, as explained by some international lawyers below. A PO can be a PDF or Word file, but as or more effective can be the statement within the body of a regular email. In some email programs you can view an email in Raw View, which shows the path how that email got to you over the internet. Together with a statement within the email explicitly assigning some work to you, it can easily serve as a binding purchase order. Just make sure that the statement also includes a payment schedule and some penalty for late payment. You should be able to find on the internet legal samples of good wording and what points to include. The problem is that such legal documents are most often valid only in the native language of the country where your customer is located, so binding your international customer to payment can pose many problems. It should also be worded correctly according to that country's law. And even if everything is written correctly, the costs involved in hiring a lawyer in that country to represent you can be prohibitively expensive. However, a well written and officially sent letter (from a lawyer) by post can often scare most customers into paying you.
When researching your customer make sure to look at their email address. If someone is writing to you from a Hotmail address you should be wary. If they say they are representing a large company, you should ask them why they are not writing to you from a corporate email address. You can also write to the company and ask for verification whether that person works there and if they are authorised to farm out such work. When responding to their email make a note of the address you are it is being sent to, as it is easy to set up the identity (what the address and name looks like when you read the incoming email) differently than the Reply To address.
In addition to all these points, perhaps the best strategy is to ask for partial payment for partial delivery, until trust is established. Although this can be more difficult with translation agencies who often have to wait 30 or more days to receive payment from their customer. Furthermore, demanding prompt or partial payment from an agency could lead them to using someone else, in which case you will not get your foot into the door of potentially a lot of future and regular work. You might therefore be better off to start with smaller amounts of work and wait until they pay before accepting more. On the other hand, if you are not busy with other work, you could take the chance and accept a larger project prior to payment.
If you accept a very large project, such as if you are acting as a translation agency and farming out many documents to other translators and you want to make sure you do not bury yourself into debt hole, the below responses from a couple of international lawyers could shed some light on how you can protect yourself.
Here are brief and preliminary responses to your questions. Ordinarily we would not respond substantively to legal inquiries without first being formally retained as counsel.
1. Is there some standard contract which can be written and which will
protect me?
Answer: There are no pre-existing standard contracts, but we could prepare
one or more standard contracts for your company to be used with your various
suppliers, customers. As for protection, a contract is only as effective as the
will of the aggrieved party to enforce the contract. It is after all only a
piece of paper. If your company has a well drafted agreement and has the will
and resources to enforce it, it can be enforced.
2. Do I have any hope of extracting payment from non-paying customers?
Answer: Yes, but the practicalities of enforcement vary from case to case
and depend on such factors as the existing and formulation of the underlying
contractual obligation; the place of enforcement and applicable law; the cost of
enforcing the contract; etc.
3. Considering the location of my business, which countries are more
secure for me?
Answer: This is very difficult to answer not knowing where you do business.
Ideally, you should provide services to customers in countries which have a
functioning legal system that recognizes the enforceability of contracts made
with foreign companies, such as your own. However, with proper planning it is
possible to work with customers in countries with less developed legal systems.
4. Is there some protocol I should follow whereby the customer confirms
receipt of my translations as I send them to it?
Answer: Part of your strategy should be to develop a set of procedures which
will reduce the risk of non-payment. For example, when a translation is ready to
be sent to a client, you could require partial payment as a precondition for
dispatch of the translation. As you develop experience with particular clients,
you may be willing to relax your payment/credit terms. By the same token,
clients with poor credit histories may require payment of translation fees in
advance. You can also consider asking for bank references from clients
requesting large jobs, etc. Another strategy may be to use credit cards or a
payment service such as PayPal.
5. How about existing customers who owe me? I have one in Switzerland,
which is outright ignoring my emails, although the balance due is only about a
thousand dollars.
Answer: Where a customer is "stone-walling" you, you have several options:
(a) sending him a registered letter; (b) having your lawyer send him a
registered letter; (c) hiring a local collection agency to collect the debt; (c)
bringing suit.
6. What are your rates?
Answer: Our fee schedule is flexible. However, for new clients without a
payment history, we charge US$300.00 per hour, plus out-of-pocket disbursements,
if any. For large cases, we may consider a partial contingency arrangement.
Alternatively, we might be amenable to a fixed montly retainer fee which would
cover a pre-determined bank of hours (non-cumulative).
7. Could you at least send a scary and threatening letter?
Answer: Once retained formally by you, sending a demand letter is definitely
one of our options.
8. Is there some Better Business Bureau or something like that in
Switzerland where I can issue a complaint and hopefully cause this company a bad
reputation?
Answer: We are not Swiss attorneys and therefore are not intimately familiar
with the business environment in Switzerland, although we have extensive
experience in dealing with Swiss companies and transactions. First, Switzerland
is a confederation and therefore legal and business matters tend to be organized
according to Cantons. Second, most Cantons have chambers of commerce, like the
Zurich Handelskammer. There may be other alternatives as well.
I trust the foregoing is sufficiently responsive to your inquiry to allow you to decide whether to retain our services. I await word from you.
Marc Zell, Adv.
Zell, Goldberg & Co.
The questions you raise are the questions all companies raise and there are no set answers, but here goes.
1. Payment in advance is the best solution.
2. It would make sense for you to have a really good contract in English for all countries. This contract would provide for arbitration and would also provide that the prevailing party gets its attorneys' fees. We would charge $3500 for such a contract. This contract should increase your chances of getting paid and also increase your chances of prevailing in litigation if someone does not pay. It should also reduce your litigation costs.
3. We charge $350 an hour and so it does not make sense for us to write that Swiss company. But, we would do it for free if you retain us for the contract.
4. Even with the contract, it would probably not be worthwhile to sue for only $1000.
5. Some countries are definitely better than others in terms of collecting.
Having an arbitration clause will help even this out a bit though.
thank you for your response, which is roughly what I thought it would be and was afraid of. When signing a contract, do they just need to respond to a PO sent by email? Perhaps the contract stipulations within the body of the email, and when they respond "we accept" it is considered a binding contract? Or is something more fancy like a PDF file, possibly encrypted or something, required?
The fancier the better because it varies from country to country. I would at least send them a pdf and say that by signing on for your services they accept the provisions in the pdf. What we also do is add the provisions to the website and say they accept the terms there. But, I fear that without a lawyer drafting your provisions you are no better off than where you are now. Try finding a lawyer in the Czech Republic who does international law. They should be cheaper than us.
Some people have indicated to me that an email by itself can serve as a binding contract. When I look at my incoming emails in "raw veiw", it shows exactly who sent it, and how etc. (through which internet provider etc.). If in the body of the email some contract is stipulated, in combination with the raw view data, I guess it can prove they sent it and it can become binding. I'd like to move towards a system where I would send the details to the customer and all they would have to say is "I accept" somewhere. Perhaps eventually some fancy html email form which they could open in Outlook, select a radio button stating "I accept" or something, and it all gets encrypted or secure or something like that. Some translators I work with have such a system. And then some other system where they confirm receipt of a translation. Will take some time to develop I guess. And maybe I'll have different forms based on country, so it looks really scary and legit, and gives me more legal jaws if I have to chase after them, although I doubt I would do that most of the time, unless the orders are very large. And if they are very large, I'm simply going to demand payment by installments etc. But it would be nice to have a very professional and serious looking contract system.
A good contract system will not
only help you should you not get paid, it will decrease the likelihood of
someone not paying you. Do whatever you can to make your system better.
Daniel P. Harris | HarrisMoure pllc
720 Olive Way, Suite 1000 | Seattle, WA 98101
(206) 224-5657 | Fax: (206) 224-5659 | International Law Firm
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