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How interdependent are different POs from the same outsourcer?
Thread poster: Mikhail Kropotov

Mikhail Kropotov  Identity Verified
Russian Federation
Local time: 00:37
Member (2005)
English to Russian
+ ...
Sep 3, 2015

I successfully delivered work on several POs for a US translation agency for a total of about $3,000. The last assignment and delivery, however, did not go as well. I decided not to argue and left out the last PO off my invoice completely. I invoiced the agency only for those first POs where no issues were raised.

The agency now refuses to pay against my invoice at all. They claim that "they've put a hold on my account" because they somehow incurred damages in connection with my work on the uninvoiced PO which outweigh the total amount invoiced.

My question is this:

Can an outsourcer unilaterally withhold payment for assignments completed with no issues because of issues with a single later assignment?

Put another way, must all work done for an outsourcer be treated as part of the same collaboration, or can different POs be processed separately and independently from each other?

Any advice will be appreciated. Thank you.

P.S. Another claim of theirs is that I sent my invoice several months after the work was delivered, while their rules state that all invoices must be submitted within 3 days of delivery. Can this be reason enough not to pay?


 

Sheila Wilson  Identity Verified
Spain
Local time: 22:37
Member (2007)
English
+ ...
They are bullies Sep 3, 2015

There's no other explanation for their actions. They are simply the "big corporation" (even if it's just an insignificant agency) trying to ride roughshod over the rights of a "little freelancer". Well, a little freelancer has as many rights in business as a company. Big or small, the two parties are equal partners.

The company has no right to refuse payment for the job that didn't go well. However, it's normal for them to seek, or rather for you to offer, a discount - up to 100% if appropriate. Anything more is totally illegal. There is absolutely no way they can withhold payment for jobs that gave no quality issues. And it's up to you when you present the invoice. There might be a limit, but it will be in years, not a few months.

If the invoice due date has passed they are in default. I would advise you to escalate the issue in the normal way. Tell them at each stage that you aren't going to stand for this and you WILL be paid for the work done that appears on the invoice.

Technically, they MAY be able to sue you for damages. However, whereas a claim for payment of invoices is almost 100% guaranteed to succeed, claims for damages are very uncertain. If it's an agency, they had an obligation too. Just because (if) their client has lost money and sues them, it doesn't necessarily follow that they can pass the responsibility onto you. You have no contractual relationship with their client whatsoever.

I do hope you won't let yourself be bullied. Not only should you fight it, but you should warn others of the way this company does business, e.g. through the Blue Board, LinkedIn's naming and shaming group etc. We all need to know about bullies.


 

Mikhail Kropotov  Identity Verified
Russian Federation
Local time: 00:37
Member (2005)
English to Russian
+ ...
TOPIC STARTER
Excerpt from Contractor Agreement I signed with them Sep 3, 2015

Thank you, Sheila!

I did sign an Independent Contractor Agreement with this agency. Here are some provisions from it that I suppose could be relevant:

7. Contractor shall release, defend, indemnify, and hold harmless Company and Company Clients from and against any and all liabilities for death, illness, or injury to Contractor or for loss of or damage to Contractor’s property, caused by an act of commission or omission, direct or indirect, of Contractor in the performance of the services, and against all claims, demands, proceedings, causes of action, and costs and expenses (including those for reasonable attorney’s fees) resulting therefrom.

14. In the event that any relevant concern should arise about the quality of services provided by Contractor or about Contractor's professionalism, either on the part of Company or as a result of a complaint by Company Clients, Company reserves the right to remove Contractor from the particular assignment. Contractor shall be paid only for those days and hours actually worked. Failure to return written work by the specified due date and time without the prior written consent of Company, or excessive errors or sloppiness could result in the cancellation of an assignment or a reduction in payment to Contractor for that assignment.

(Bold font above is not mine but preserved from the Agreement)

23. This Agreement shall be governed and construed in accordance with the laws of the State of California, USA.

Reviewing the Agreement closely, I fail to see any provisions that would allow them to pass any more responsibility on to me.

Does this perhaps shed any more light on my situation?

[Edited at 2015-09-03 09:41 GMT]


 

Vadim Kadyrov  Identity Verified
Ukraine
Local time: 00:37
Member (2011)
English to Russian
+ ...
I believe this will be the end of your Sep 3, 2015

successful cooperation with this company.

Which means that you are now free to take any actions you deem necessary to get the payment.






[Edited at 2015-09-03 12:37 GMT]


 

Mikhail Kropotov  Identity Verified
Russian Federation
Local time: 00:37
Member (2005)
English to Russian
+ ...
TOPIC STARTER
The cooperation has already ended Sep 3, 2015

By mutual decision. That is not the problem. Of course I'm free to act as I see fit. The question is whether I should spend more time and effort trying to collect, as in that case they're threatening reciprocal legal action.

[Edited at 2015-09-03 12:41 GMT]


 

Jean Lachaud  Identity Verified
United States
Local time: 17:37
English to French
+ ...
Don't forget costs Sep 3, 2015

What you describe screams for a lawyer. I don't have to remind you of the cost of US lawyers. So, what is at bay is not only time and effort, but money out of your pocket before getting any (if at all) of your money.

OTOH, as has been widely discussed in ProZ and other forums, legal actions against translators are few and far between, but then again you live far away.


Mikhail Kropotov wrote:

By mutual decision. That is not the problem. Of course I'm free to act as I see fit. The question is whether I should spend more time and effort trying to collect, as in that case they're threatening reciprocal legal action.

[Edited at 2015-09-03 12:41 GMT]


 

Mikhail Kropotov  Identity Verified
Russian Federation
Local time: 00:37
Member (2005)
English to Russian
+ ...
TOPIC STARTER
What kind of lawyer should I look for? Sep 3, 2015

JL01 wrote:

What you describe screams for a lawyer. I don't have to remind you of the cost of US lawyers. So, what is at bay is not only time and effort, but money out of your pocket before getting any (if at all) of your money.

OTOH, as has been widely discussed in ProZ and other forums, legal actions against translators are few and far between, but then again you live far away.


Sorry for this silly question, but what kind of specialization should I look for in a lawyer? Are they called "Collection Attorneys" or maybe something else? I'm a complete novice in this terminology.

Thank you!


 

Sheila Wilson  Identity Verified
Spain
Local time: 22:37
Member (2007)
English
+ ...
14 seems totally fair and reasonable to me Sep 3, 2015

I'm no lawyer, I have to say. I even refuse to translate contracts normally. That clause 7 seems really extreme but it's difficult to see it being invoked for a translation job. Highly dangerous for an interpreter though, I suspect. On the other hand, 14 seems totally fair - much better than many. And it does mean that not only are they bullying, they're also incapable of understanding their own contracticon_smile.gif.

 

Jean Lachaud  Identity Verified
United States
Local time: 17:37
English to French
+ ...
boilerplate text, nothing more Sep 3, 2015

That is because this is boilerplate contract (clue: it uses the word "contractor") written for industries which use self-employed workers (oil industry, truck driving, etc.).

The use of such very common boilerplate contracts with little relevance to the translation industry is a clue to the fact that the agency lawyer, and often the owners, have no clue about how the translation industry works.


Sheila Wilson wrote:

I'm no lawyer, I have to say. I even refuse to translate contracts normally. That clause 7 seems really extreme but it's difficult to see it being invoked for a translation job. Highly dangerous for an interpreter though, I suspect. On the other hand, 14 seems totally fair - much better than many. And it does mean that not only are they bullying, they're also incapable of understanding their own contracticon_smile.gif.


 

Jean Lachaud  Identity Verified
United States
Local time: 17:37
English to French
+ ...
I am not giving legal advice Sep 3, 2015

There may be collection attorneys, indeed, but any business lawyer should do, since this is a contract dispute.

Of course, the lawyer needs to be a member of the bar association in the state which governs your Independent Contractor Agreement.

For the record, here in NYC, lawyers charge about USD400/hour.


Mikhail Kropotov wrote:


Sorry for this silly question, but what kind of specialization should I look for in a lawyer? Are they called "Collection Attorneys" or maybe something else? I'm a complete novice in this terminology.

Thank you!


 

Charlie Bavington (X)  Identity Verified
Local time: 22:37
French to English
The "And Another Thing" Approach Sep 3, 2015

Mikhail Kropotov wrote:

They claim that "they've put a hold on my account" because they somehow incurred damages in connection with my work on the uninvoiced PO which outweigh the total amount invoiced.

(..)

Another claim of theirs is that I sent my invoice several months after the work was delivered, while their rules state that all invoices must be submitted within 3 days of delivery. Can this be reason enough not to pay?


First, you need to clarify why exactly they are not paying which amount(s). While allowing for the fact that it could be they feel some of the bill is too late, and some is deducted for the cost of making good your alleged poor performance, resulting in a total of nil, it smacks to me of just giving as many excuses as they can think of. You can search time limits for billing same as I can I, but brief research indicates years not months.

All that said, the small print of many agreements does provide for us to be liable for making good unsatisfactory performance. You've only quoted the late delivery provisions, which presumably was not the issue (my inference from your description). Some do try to stipulate that this can implicitly exceed the amount of the assignment in question (see more here http://cbavington.com/blog/2014/11/05/oh-look-a-penalty-clause/ ) I can see a complication in that, if you have billed zero for the job in question, and they want to enforce a penalty of some kind, that the penalty money has to come from elsewhere, i.e. other assignments you have billed for.

Nonetheless, my immediate feeling, just from the apparent "oh, and other thing" approach of the late billing idea, is that they could be fishing around for excuses not to pay. I'd seek clarification of what amounts precisely they are claiming to withhold and why.


 

Mikhail Kropotov  Identity Verified
Russian Federation
Local time: 00:37
Member (2005)
English to Russian
+ ...
TOPIC STARTER
The primary reason Sep 3, 2015

The mention of 3 days is probably an afterthought. I'm inclined to dismiss it as a serious claim. The primary reason they cite can be summarized as follows:

"We have discussed this issue internally as well as with our counsel and unfortunately, we have come to the decision that payment cannot be made for this invoice. [...] Due to your [inadequate performance], we lost a very important client resulting in having to forfeit payment for other translations (other languages) as well as losing tens of thousands of dollars in future revenue. [...] The financial losses we incurred greatly surpass the amount of your invoice."

[Edited at 2015-09-03 15:43 GMT]


 

LegalTransform  Identity Verified
United States
Local time: 17:37
Member (2002)
Spanish to English
+ ...
Yes, but... Sep 3, 2015

... are their claims that your performance was "inadequate" accurate? Who made this determination? The client? An independent auditor? If your performance was not "inadequate" then you are entitled to full payment even if the end client claims disatisfaction.

Mikhail Kropotov wrote:



[Edited at 2015-09-03 16:37 GMT]


 

Mikhail Kropotov  Identity Verified
Russian Federation
Local time: 00:37
Member (2005)
English to Russian
+ ...
TOPIC STARTER
I'm not contesting that particular claim Sep 3, 2015

Jeff Whittaker wrote:
... are their claims that your performance was "inadequate" accurate? Who made this determination? The client? An independent auditor? If your performance was not "inadequate" then you are entitled to full payment even if the end client claims disatisfaction.


I'm not contesting any claims made about my performance on that last assignment, which I did not nor intend to invoice. At this point I'm interested in collecting payment only on the other assignments, which I did deliver to expectations, which did not lead to any complaints, and which I invoiced.

Do you think one can be 'divorced' from the other?

[Edited at 2015-09-03 16:42 GMT]


 

Sheila Wilson  Identity Verified
Spain
Local time: 22:37
Member (2007)
English
+ ...
What has their future business got to do with you (in the eyes of the law)??? Sep 3, 2015

Mikhail Kropotov wrote:
Due to your [inadequate performance], we lost a very important client resulting in having to forfeit payment for other translations (other languages) as well as losing tens of thousands of dollars in future revenue. [ ... ] The financial losses we incurred greatly surpass the amount of your invoice."


1) If those other translations were done perfectly well, and their client is refusing to pay for them, then they should take their client to court!
2) their financial good health or ill health has absolutely nothing to do with you!

Yes, they're human and they're bound to be angry; yes, they won't want to pay you anything for the job that didn't work out; yes, they'll refuse to have anything to do with you in future. But will they be entitled to withhold payment for work that was accepted and is presumably making money for the end client, and for them? NO!

Those rates for US lawyers seem crazy. I haven't had call to use lawyers very much, just a little for personal reasons and once for my business, but I've never been charged more than a quarter of JL01's figure. If I were you, I'd try to find a competent local lawyer who is experienced in dealing with the US and speaks English, if such an animal exists. Would s/he charge that much? Perhaps an official lawyer's letter on their heavily embossed headed stationery would do the trick. I got one done in France for EUR 50 a few years ago and found it scared my client into paying - they knew then I wasn't just going to go away.


 
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