late payment, non-response to e-mails, terms of invoicing, jurisdiction
Thread poster: dekrafft
dekrafft
German to English
+ ...
Feb 19, 2009

Over the course of last year, I performed several dozen jobs for an agency (with a ProZ presence and reasonably good LWA rating) that's incorporated in Germany and the US. I finally submitted the invoice for all these jobs (several thousand dollars) late last year. The accounting department, and then the manager of the agency, wrote back to me saying the terms on the POs state they must be invoiced within 3 days of PO issuance, which I hadn't really noticed or worried much about. (Though obviously bad practice, I often let POs pile up and have never had a problem with other agencies; also, the PM I was in contact with didn't indicate this was a problem -- if anything, I'd think an agency would be happy with a translator waiting to request payment.)

They stated that their accounting system doesn't really allow for invoices that cover more than 30 days (seems odd to me) and that they would pay in 'parcels,' i.e. portions of the invoice, every month from 60 days of invoice, which I obviously wasn't happy about but, if followed, would be a semi-acceptable solution.

The invoice was submitted four months ago, so with the two-month term of payment they're now two months overdue in paying anything at all. They have not responded recently to at first polite then gradually more stern inquiries about payment, so I just threatened legal action if they do not pay the full amount within two weeks. I know they're still in business and checking their e-mail.

Finally, note that I am not currently in or anywhere near either the US or Germany, so submitting documents/etc. in-person is out of the question.

My questions for now are:
1) Are stipulations on purchase orders such as the 3-day rule mentioned above legally valid (specifically in Germany)? I don't believe this will be an issue, as the agency has already stated multiple times that they will pay, i.e. they didn't cite this as a way to back out of payment.

2) Does anyone have experience with claims against agencies incorporated in multiple countries, i.e. might I be able to pursue claims against them in the US instead of Germany (or in the US if attempts in Germany fail)? All purchase orders were issued by their German office and the invoice was submitted to their German office, though I also interacted with US-based staff and the manager is in the US. On ProZ, the agency gives a US address. I haven't done any in-depth research into their incorporation status in either country, though that's next on my to-do list.

3) If, as I expect, I will have to file a claim against their German office, would I benefit at all by submitting it to the Zentrales Mahngericht in Berlin instead of pursuing them through a (German) collection agency? As I understand, in Germany the debtor is required to pay all or essentially all costs of collection, which would be a nice punitive side-effect.

Many thanks in advance for any advice and pardon if the explanation was a bit wordy.

And yes, I've learned my lesson: I now invoice much more frequently.

EDIT: Re question 2, the German office is a fully-owned subsidiary of the US office.

[Edited at 2009-02-19 08:53 GMT]

EDIT 2: Seems the terms for invoicing POs are actually within 3 days of job completion instead of PO issuance.

[Edited at 2009-02-19 15:48 GMT]


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Derek Gill Franßen  Identity Verified
Germany
Local time: 22:55
German to English
+ ...
Sounds strange to me... Feb 19, 2009

THIS IS NOT LEGAL ADVICE (you would have to pay for it, if it were)! YOU SHOULD CONTACT A LAWYER YOU TRUST FOR ADVICE ON YOUR PARTICULAR CASE.

Ok, that is out of the way...

Wouldn't it be fun to try something like this when you buy a car? Just add a small clause to the contract stating that if you aren't invoiced within two days, you don't owe them anything! (In fact, why not write "within 15 minutes of me blowing my nose for the third time this week" just to make it more fun?)

Does that sound ridiculous? It is.

I don't understand them at all... if anything, they should love you for submitting your invoice so late, since by doing so you are, in a way, extending them an interest-free loan.

Now, if they really wanted it to be invoiced quickly, then they could demand an invoice and could probably even take you to court and force you to submit one. But most debtors wouldn't do that, since almost everyone loves interest-free loans.

One thing you probably do want to watch out for is whatever statutes of limitations apply, but in most places that is a question of years, not days... or even months.


[Edited at 2009-02-20 13:08 GMT]


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Arnaud HERVE  Identity Verified
France
Local time: 22:55
English to French
+ ...
Abusive Feb 19, 2009

In many countries, agreements like that are not entirely free. They are surrounded by an important jurisprudence stating that this and that clauses are abusive.

If one clause is abusive, it makes the agreement invalid.

In your case, the 3 days limit seems more like an internal decision from some annoying technocrat, than something that can really be enforced outside the company.

Refuse to pay, I believe they cannot do that. The 3 days limit is their own problem, and international economy doesn't have to adapt to their 3 days limit.

However I cannot answer precisely for the countries you mention.

EDIT: Maybe if they were able to prove that they cannot process your invoice after 3 days, they could win this case. That is, if it was an absolute necessity for them. However, I believe they cannot prove that their accountant will be totally unavailable after 3 days.

You are also advantaged if you can show that you had a good reason not to send so soon. For example the fact that you meet your accountant only at the end of each month.

There is something called a statute of limitation, which states the maximum delay of validity for presenting an invoice. This delay differs for each country, but I would be surprised if something else than the statute of limitation was received as a serious delay by any court of law.

When doing your research you can also mistake your B to B case with B to Consumer rules. In B to C, the invoice must be presented immediately. In B to B, usually the accountant is happy to receive your invoice when you find time to write and send it.

[Edited at 2009-02-19 14:42 GMT]


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Laurent KRAULAND  Identity Verified
France
Local time: 22:55
French to German
+ ...
Some hints to begin with... Feb 19, 2009

which confirm the opinions of Derek and Arnaud:

http://www.piloh.de/rechnungsstellung-fristen.html


HTH
Laurent K.

[Edited at 2009-02-19 20:59 GMT]


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Vito Smolej
Germany
Local time: 22:55
Member (2004)
English to Slovenian
+ ...
I NEVER ever ... Feb 19, 2009

... I finally submitted the invoice for all these jobs (several thousand dollars) late last year. ...

... deliver the work ordered without the accompanying invoice for it. It is a question of financial discipline. I am not playing smart and I know it must hurt. Believe me, I was in this kind of dire straights now and then. It helped to see the eventual loss as a learning money. Of course a couple thousand dollars is a very EXPENSIVE education fee (sigh).

btw 3-days issuance etc is a piece of cake for any half-witted lawyer in Germany (Adresses on request) . I wonder how they can still have an office in Germany.

Here's the papers for the EU small claims court

http://www.proz.com/forum/money_matters/125660-european_small_claims_legislation_good_for_us.html

Regards

Vito


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Peter Bouillon  Identity Verified
Germany
Local time: 22:55
French to German
+ ...
If your invoices show VAT, you run into trouble when sending them by email Feb 20, 2009

Vito Smolej wrote:
I never deliver the work ordered without the accompanying invoice for it.


That's what I used to do, too. But nowadays, at least in German jurisdiction, you may not claim VAT as tax deduction for email invoices unless there is a big hassle with electronic signatures and such. I don't want to inflict that hassle onto my customers, so I reverted to sending paper and licking stamps.

It's a huge inconvenience for all parties concerned, and all just for fulfilling some red tape. It would be easier to bear if there were any point in it. But paper invoices do not need to be signed in Germany, and the recipient could fake an unsigned paper invoice just as easily as an unsigned email invoice. Both the sender and the recipient are required to keep their invoice copies for a decade, so IRS personnel could easily verify whether they match.

Peter

[Edited at 2009-02-20 00:59 GMT]

[Edited at 2009-02-20 01:02 GMT]


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dekrafft
German to English
+ ...
TOPIC STARTER
thanks for the replies and advice Feb 20, 2009

Thanks for the replies, especially the link about the Fristen and the classification of such clauses as potentially 'abusive'. They're still playing around with that 3-day rule as a legitimate excuse to claim I submitted invoices "late," though it seems more that their accounting is fudgy (and perhaps cooked). This is becoming more interesting, much moreso since they actually responded to my threats of litigation but aren't really saying anything consistent or legally defensible, seem to just be huffing and puffing and hoping I'll back off, which isn't going to happen.

Thanks, Vito, for the advice on invoicing. Looks like I'll have to start that policy soon. It's all unfortunate because I have a really good working relationship with all the other agencies I've worked for, never anything other than relatively minor problems, which perhaps lulled me into complacency about the sorts of silly tricks some agencies can try to pull.

We'll see where it goes from here.


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Michael Roberts  Identity Verified
United States
Local time: 16:55
Member (2002)
German to English
+ ...
Invoices do need to be signed in Germany (I think) Feb 24, 2009

Peter Bouillon wrote:

But paper invoices do not need to be signed in Germany, and the recipient could fake an unsigned paper invoice just as easily as an unsigned email invoice.


I don't think this is true -- even if people do things wrong. Invoices do need to be signed in Germany, according to my research (I could probably re-find references if anyone wants them). That's the point of the Signaturgesetz, to ensure that electronically submitted invoices have the same legal force as paper invoices -- which are signed.


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Ralf Lemster  Identity Verified
Germany
Local time: 22:55
English to German
+ ...
Where do you see that requirement for paper invoices? Feb 24, 2009

Hi Michael,
Where do you see a requirement for written invoices to be signed?



I don't think this is true -- even if people do things wrong. Invoices do need to be signed in Germany, according to my research (I could probably re-find references if anyone wants them).

Please do - I have not signed a single invoice over the last decade, and never had a problem.

That's the point of the Signaturgesetz, to ensure that electronically submitted invoices have the same legal force as paper invoices -- which are signed.

I take it you're referring to the Gesetz über Rahmenbedingungen für elektronische Signaturen? If you have a look at section 1 of this Act, you'll see that its scope is limited to electronic signatures.

The most comprehensive German legal norm governing invoices is presumably section 14 of the German VAT Act - the only signature requirement stated there explicitly refers to invoices sent via electronic data transmission.

Best regards,
Ralf


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