Project cancellation fee
Thread poster: MariusV

MariusV  Identity Verified
Lithuania
Local time: 19:24
English to Lithuanian
+ ...
Sep 7, 2012

Dear colleagues,

I just had a totally crazy situation and need your advice. It would be also interesting to discuss on the topic.

The situation: on Wednesday late noon (USA client, I am in Europe, i.e. “my late noon”, i.e. evening) I received an order for a very highly technical biochemical translation project (which meant 4 days of really tough work) for delivery on Monday (USA) morning next week. As I have a strong specialist who works the reviser, the rate offered was really good, I could not resist the temptation to say “yes”. All seemed OK, I started working on a full scale, today my evening I was in the middle of the project, sent half of the project to the proofreader (university professor) who revised it. Canceled my weekend plans with my family (as to manage it for Monday), refused all and any other work (had quite a good project at the same time), received the revised text from the proofreader, replied to the PM of the client asking “How is it going with the project?” “Thank you, everything is OK, no problems, all will be done exactly on time and in due quality, please do not worry” and went to sleep. Then at 3 am (of my damned European time) all my phones started ringing like crazy. What is the first thought that comes into one's head when someone calls at 3 am? In my case, the first idea was that something bad happened to someone (e.g. someone of close relatives deceased, or something serious happened to friends, relatives, etc.). NO. That was an insisting call from the USA client, their PM. With a strongly dissatisfied tone they started asking me if I got their emails and why I did not send them anything what is already done as THEIR client canceled the project (gave wrong outdated source files). I had to reply that the main reason for not replying soon was that in my country people usually sleep during the night and I cannot check nor respond my email when sleeping. I fully understand that there was no need for such strong wording, but at 3 am, in “hibernation regime” and stress, it happened. Then got their email telling that because I did not send what they requested and when they requested (what was already done for the moment), not only they cancel the project, but that I shall not expect any payment nor any other projects from them in the future.

How do you like that? Of course, this is a really rare situation (nothing of a kind ever happened during my 15 years of translation practice), but don’t you think we shall ask clients for some agreement on project cancellation fee? Even if the client is normal, and if their end client cancels the project for some reason, and if they agree to pay for what was done at the moment of cancellation, it means quite a lot of losses (other projects refused, schedules made upside down, not even counting stress, and other things). What is your opinion? I think we shall ask for at least some 70-80% (or even 100%) payment for cancellation and it shall be included black on white in the PO. We cannot do same in a “vice versa” situation. Say, the client orders a project with the volume for work for 10 days, and on the last day before the deadline the translator tells “You know, I decided I want to cancel this project…And I did only half of it so far, but do not worry, I will only invoice you for the part that I did”…Just try to imagine the chaos the client will have...Not even speaking about the emotional side.


[Edited at 2012-09-07 02:21 GMT]


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Katalin Horváth McClure  Identity Verified
United States
Local time: 12:24
Member (2002)
English to Hungarian
+ ...
Yes, you should protect yourself Sep 7, 2012

From the ATA model contract:

3. Cancellation or withdrawal by Client. If Client cancels or withdraws any portion of the item(s) described in paragraph 1 above prior to Translator's completion of the service(s), then, in consideration of Translator's scheduling and/or performing said service(s) Client shall pay Translator the portion of the above fee represented by the percentage of total service(s) performed, but in any event not less than _____% of said fee.


A few links to previous discussions on the topic:

http://www.proz.com/forum/business_issues/66526-how_to_calculate_damages_for_loss_of_income.html

http://www.proz.com/forum/money_matters/142948-translation_cancellation_by_the_agency_or_customer:_what_to_do.html

http://www.proz.com/forum/translation_project_vendor_management/133951-about_po_project_cancellation_compensation_penalty.html


[Edited at 2012-09-07 02:54 GMT]


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MariusV  Identity Verified
Lithuania
Local time: 19:24
English to Lithuanian
+ ...
TOPIC STARTER
WOW! Perfect!!! Sep 7, 2012

Thank you very much indeed. It is an ideal wording both from legal and practical side!

Could you also suggest where I could find a similar wording for one more thing against situations where "Our client is late with the payment to us / has not paid us at all (something wrong went between them), so we cannot pay you yet (despite they are late or very much late)/cannot pay at all". I.e. that "John and Peter have a mutual/bilateral deal and no one cares if something happens with their own "third parties". I saw one formulation on the Internet long ago with a very good wording, but cannot recall it exactly nor can remember where I saw it...


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 18:24
Member (2005)
English to Spanish
+ ...
Exactly Sep 7, 2012

They should pay you whatever was completed by the time they sent the cancellation message. Full stop. No other consideration is acceptable. Make a firm statement in this sense, and request payment for the part that was done.

If they fail to pay you for that part, make sure you add a Blueboard entry about them so that others are warned. Give them an opportunity to correct the situation, since it is also possible that a clumsy/arrogant PM is causing trouble to his company. If the PM is not reasonable, demand to talk to his/her superior.


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Curri Barcelo Avila  Identity Verified
Spain
Local time: 18:24
Member (2009)
English to Spanish
+ ...
Ask them to pay Sep 7, 2012

I have been in a cancellation-point-after-you-have-already-started just a couple of times and they have always paid me for what I had done. It would be different if they hadn't given the go-ahead or sent you any e-mails asking "how are you doing?" and you had started.

If they think that everybody lives in their own timezone, well, that is not your fault, and if they see that you don't answer, then they should thinks that maybe it's because your working time has finished for the day. Also, did they actually tell you that you had to send a first batch on Friday? It doesn't seem so, otherwise, you would have sent it to them. Well, then I would simply tell them that you did your part of the deal and that they have to pay you for that. In other professions, thigns like that doesn't happen. For example, if you call a plumber to come home to fix your toilet, as soon as they get into the car, they start charging you. If they arrive home, start looking at the toilet and then you tell them that they have to leave because you need to go shopping, they will charge you for the whole hour plus the travelling expenses, even if they haven't even got into your bathroom. And I don't think anybody would just say: well, I am not going to pay you (they probably do, but they end up paying anyway). Then you must do the same.

I hope you get your way through this and they agree on paying you a bit.


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xxxXX789  Identity Verified
Netherlands
Local time: 18:24
English to Dutch
+ ...
War Sep 7, 2012

This is war. You give them exactly one week to pay the full amount for the work already done. If the amount is not on your account exactly 1 second after the deadline, send a debt collection agency and ask this agency to use the most aggressive approach possible. Sue their asses off if needed, even if it costs you more money than you will get in the end.

This behavior is totally unacceptable.


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Thayenga  Identity Verified
Germany
Local time: 18:24
Member (2009)
English to German
+ ...
Pay earned Sep 7, 2012

They must pay your for the work you've already completed.

That they don't think about you living in different time zones, is no excuse for anything.
You might check with a customers' complaint office in the USA, aside from posting a negative BB entry. If the agency doesn't have a BB record, create one.

Try to make the PM or his/her superior understand that you have worked for them and must get paid. You can also mention having turned down a different project (which might not impress or concern them at all). Point out the rules of proper business conduct to them.

Good luck!


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Vladimír Hoffman  Identity Verified
Slovakia
Local time: 18:24
Member (2009)
English to Slovak
+ ...
Not only for it. Sep 7, 2012

Once a client of mine cancelled a big project two days after issue of PO, indicating that I can charge for the work done. I replied that there had not been done any work in a deliverable form, but I spent two working days with studying the text and references, preparing dictionaries, preparing Trados memories, gathering internet sources and doing some rough, general translastions of the text. There is NO reason, why a translator should adapt his/her translation style so that he would be able to handover a part of completed text each day. After all, we are paid for finished product, not for a way we use to make it.

I managed to persuade the client to pay me an hourly rate.

As for failure to promptly deliver partially completed files - As the translater doesnt offer 24/7 service (I wonder if the agency does), the argument is inacceptable. And, as Loek corrently mentioned, this is war. There is already nothing to be lost (further collaboration was explicitly excluded).


Thayenga wrote:

They must pay your for the work you've already completed.



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LEXpert  Identity Verified
United States
Local time: 11:24
Member (2008)
Croatian to English
+ ...
The agency had no cancellation policy with their own client? Sep 7, 2012

Vladimír Hoffman wrote:
There is NO reason, why a translator should adapt his/her translation style so that he would be able to handover a part of completed text each day. After all, we are paid for finished product, not for a way we use to make it.


I fully agree. I generally dislike arrangements with "rolling" piecemeal deliveries of parts of a single file, and try to avoid it where possible. Such methods are recipe for suboptimal output, as 1) My internal proofing and QA are far more efficient and effective to do on a single file than on multiple partial files. 2) the additional context provided by later portions of the the source often serves clarify things might have been unclear in the first part of the file.

This outsourcer obviously had no cancellation fee arrangement in place with their own client. That's their problem, one they are now trying to shift to you. The agency needs to pay you now.







[Edited at 2012-09-07 13:49 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 17:24
Member (2007)
English
+ ...
Your second query Sep 7, 2012

MariusV wrote:
Could you also suggest where I could find a similar wording for one more thing against situations where "Our client is late with the payment to us / has not paid us at all (something wrong went between them), so we cannot pay you yet (despite they are late or very much late)/cannot pay at all". I.e. that "John and Peter have a mutual/bilateral deal and no one cares if something happens with their own "third parties". I saw one formulation on the Internet long ago with a very good wording, but cannot recall it exactly nor can remember where I saw it...


Excuse me for replying to a question that was addressed to Katalin. This is a totally different point, Marius.

Your original query concerned something that does differ from contract to contract. Companies have certain obligations when they cancel work that has already started, but the details are left down to individual agreement between the parties.

This second query has nothing to do with individual contracts and there is absolutely no room for the company to manoeuvre. In the three countries I know (and I suspect in all countries), when a freelancer and agency collaborate by signing a contract, then that contract is solely between those two parties. If the freelancer supplies suitable services, the agency is required to pay - it's as simple as that. Payment terms are either set by the freelancer or by the agency (hopefully after negotiation), or they default to the maximum periods as defined in that country's company laws.

Any contract between the agency and the end client is totally separate. If that end client never pays, then that has to be covered by the agency's business risk. That's one of the reasons why they charge quite a lot more than they pay us!


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MariusV  Identity Verified
Lithuania
Local time: 19:24
English to Lithuanian
+ ...
TOPIC STARTER
Yes, but... Sep 7, 2012

Yes, it is natural that parties can and must stipulate their mutual agreements. And the issue about that cancellation fee must be clearly stipulated too BEFORE the work starts. This is what I wanted to raise as an important question.

OK, my second issue (question to Katalin) can be somewhat off topic and, naturally, from the point of view of the common sense, mutual (bilateral) contracts are deals between two sides. But as it really happens in real life that these issues are not "quite clear" to some people (intentionally or unintentionally), I do not think it can be for worse to cover one's back adding two sentences into the PO clearly (and in writing) stating the conditions and even amounts of cancellation and a clause of "no liability/no responsibility for third parties".


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Thayenga  Identity Verified
Germany
Local time: 18:24
Member (2009)
English to German
+ ...
The contract Sep 8, 2012

Well, you could simply add a line to the contract between you and the agency that the agency will have to pay you on the date agreed upon regardless of whether their client (not your client) pays them on time or perhaps not at all. It shouldn't really be necessary, but emphasize the fact that any dealings the agency has with others (their end client/s or other translators) must not affect the contract between you and said agency in any way. After all, you did not sign an agreement with the agency's end client, but with them!

You can draft up a line or two in which you stipulate the procedures in case the agency cancels the job (again, it doesn't matter who cancels the job, the agency itself or on behalf of their end client) so that you will get paid for the work you did, even preparatory work, since it hinders/disables you from accepting other jobs.


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Katalin Horváth McClure  Identity Verified
United States
Local time: 12:24
Member (2002)
English to Hungarian
+ ...
Translation Services Model Agreement, Translation Job Model Contract Sep 8, 2012

MariusV wrote:

Thank you very much indeed. It is an ideal wording both from legal and practical side!

Could you also suggest where I could find a similar wording for one more thing against situations where "Our client is late with the payment to us / has not paid us at all (something wrong went between them), so we cannot pay you yet (despite they are late or very much late)/cannot pay at all". I.e. that "John and Peter have a mutual/bilateral deal and no one cares if something happens with their own "third parties". I saw one formulation on the Internet long ago with a very good wording, but cannot recall it exactly nor can remember where I saw it...


How about this?

Payment in full must be made by Company to Contractor no
later than _______ (__) days from receipt of invoice by the
method of payment specified in writing between the Parties.
Contractor is entitled to charge a late fee for any undisputed
overdue payments.
In no event should payment to Contractor be contingent upon
payment to Company by the party who commissioned the
work.


It is from the ATA Translation Services Agreement.
http://www.atanet.org/careers/translation_agreement_guide.pdf

Please see this entire page with explanation about both models:
http://www.atanet.org/careers/translation_agreements.php


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Nor Afizah Thalhan  Identity Verified
Malaysia
Local time: 01:24
Member (2013)
English to Malay
Sample of contract Dec 27, 2016

Hi fellow translators,

Seems like all of you have answered most of my doubts here. Agreed that we should be taken seriously as we are doing serious business here. However will anyone be kind to provide a link/sample of contract used in your business? Do you provide that together with quotation upon inquiry from them?


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