Doubt about payment terms in Germany
Thread poster: baroni

baroni  Identity Verified
Local time: 07:56
Member (2004)
English to Italian
+ ...
Jan 11, 2005

I was recently contacted by a German company (Ingenieurbüro) in order to translate some of their materials. Today I received the order confirm and I was shocked: Under the point "Payment" they say that I will be paid as soon as they become the money fromt their own customer for the whole project (Wir sind so verblieben, dass Ihre Rechnung von uns bezahlt wird, wenn wir das Hono-rar für die Leistungserbringung des Ausbaupakets von der Stadt XXX überwiesen bekommen haben). I called them back immediately and told them I needed a precise payment term, and I suggested 60 days after invoicing. I sent them a fax with thess changes, and ask to get the fax back with their signatures. But I haven't received anything yet. I don't know why but I have a bad sense of foreboding...
This company is a direct customer (no translation agency) and it should not be my problem if it does not get paid by its own customer. Have you already experienced something like that? Any suggestion??
Thank you


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Derek Gill Franßen  Identity Verified
Germany
Local time: 07:56
German to English
+ ...
THIS IS NOT MEANT TO TAKE THE PLACE OF LEGAL ADVICE BY AN ATTORNEY YOU TRUST Jan 11, 2005

This sounds like the textbook-case for what is called the "Battle of the Forms". Under German law each communication of the terms of the contract usually does not constitute an acceptance, but rather a new and individual offer. That means that their confirming something that was not agreed upon does not mean that a contract came to be with those terms.

You did the right thing in immediately communicating to them the way you see things. This, however, also doesn't mean that a contract has now been formed with your terms: your last communication would most likely be viewed (by a German court) as a new offer, which obviously has not yet been accepted.

As far as I can tell (and assuming the completeness of what you have said), no legally binding contract has been formed between you (yet). If they sign your terms and send them back, or otherwise communicate to you that they agree to your terms, then the contract will be closed (according to German law; most common law countries will also require that "consideration" be given: in this case the mutual promises).

Generally German companies do not stipulate this type of payment (I have never encountered it in my 11 years of dealing with German firms). I think that you are correct in assuming that it is their problem if they can't collect.

In fact, I have only been asked once (by one of my less serious clients) to give a discount because the project, for which I did the translation, was never realized (their prospective customer didn't take the bid). Though I may be tempted to do so in hopes that it will lead to additional jobs (I didn't in this particular case), I don't think that it is generally a good idea: you did the work and you should get paid for it. Imagine what would happen if business was done that way generally.

In closing, I think that you offering a payment period of 60 days after receipt of the invoice is extremely (too) generous. I don't think I have ever granted a payment period of longer than 4 weeks (usually 2-3 weeks, as do all of those who send me invoices).

Hope you get the job!


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baroni  Identity Verified
Local time: 07:56
Member (2004)
English to Italian
+ ...
TOPIC STARTER
Herzlichen Dank für die guten Tipps und Infos! Jan 11, 2005

Derek Gill wrote:

This sounds like the textbook-case for what is called the "Battle of the Forms". Under German law each communication of the terms of the contract usually does not constitute an acceptance, but rather a new and individual offer. That means that their confirming something that was not agreed upon does not mean that a contract came to be with those terms.

You did the right thing in immediately communicating to them the way you see things. This, however, also doesn't mean that a contract has now been formed with your terms: your last communication would most likely be viewed (by a German court) as a new offer, which obviously has not yet been accepted.

As far as I can tell (and assuming the completeness of what you have said), no legally binding contract has been formed between you (yet). If they sign your terms and send them back, or otherwise communicate to you that they agree to your terms, then the contract will be closed (according to German law; most common law countries will also require that "consideration" be given: in this case the mutual promises).

Generally German companies do not stipulate this type of payment (I have never encountered it in my 11 years of dealing with German firms). I think that you are correct in assuming that it is their problem if they can't collect.

In fact, I have only been asked once (by one of my less serious clients) to give a discount because the project, for which I did the translation, was never realized (their prospective customer didn't take the bid). Though I may be tempted to do so in hopes that it will lead to additional jobs (I didn't in this particular case), I don't think that it is generally a good idea: you did the work and you should get paid for it. Imagine what would happen if business was done that way generally.

In closing, I think that you offering a payment period of 60 days after receipt of the invoice is extremely (too) generous. I don't think I have ever granted a payment period of longer than 4 weeks (usually 2-3 weeks, as do all of those who send me invoices).

Hope you get the job!


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Anjo Sterringa  Identity Verified
Spain
Local time: 07:56
Member (2003)
English to Dutch
+ ...
Do not accept to get paid when/if your client gets paid Jan 12, 2005

I have never heard of such a clause as a translator or working in the yachting service industry - you have a contract with your client, B. Let's say you are C, your client is B and their client is A. B will have to pay C for services rendered on the conditions that exist between B and C (which should not have anything to do with when and if A pays!). This relationship does not have anything to do with the relationship between B and A - their project with A is probably a large engineering project and your job is just a tiny part of it. Furthermore, what would happen if A did not pay at all because B fails to perform through no fault of C? If they wanted any direct relation to exist between C and A, B should be acting as an agent for A which is not the case! What they state as payment terms is more than just payment terms - they make their payment to you (C) depending on the payment to them (B) by a third party (A). I think you did well by immediately sending a fax, and I would never accept payment terms like that. Good luck!

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xxxAdrian MM.
Local time: 07:56
French to English
+ ...
This is a practical business and not just a legal matter Feb 6, 2005

It is quite true that, strictly in law, you have no privity of contract with the end-users. Their payment for the project should not be your concern. Yet quite clearly it is. You are likely to lose the job if you insist on your direct-payment terms notwithstanding.

As a matter of practicality, the engineering office don't seem inclined to raise the money with a loan pending the transfer (Überweisung)to them. However, the would-be end-payers Stadt x are a municipal authority, virtually guaranteeing the chances of actual payment - following successful completion - to the engineering offices.

If you have the name of the Stadt/verwaltung, you could also make enquiries about obtaining a guarantee from them direct or their bank for payment of your bill -> selbstschuldnerische Bürgschaft von einer namhaften Großbank etc. See your Austrian Hausbank or Rechtsanwalt about the matter.

Incidentally, I fail to see how an Exxon-case 'battle of the forms' comes into it. Neither you, nor the engineering office, have standard-form terms & conds of business, but just different terms you are trying to foist on each other, with you unfortunately in the weaker negotiating position.

[Edited at 2005-02-06 12:59]


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BrigitteHilgner  Identity Verified
Austria
Local time: 07:56
German to English
+ ...
Some just try it - not only in Germany Feb 6, 2005

I had similar problems with a client in Germany, one in Switzerland and one in the USA. None of them told me in advance - they just used the excuse (waiting to be paid ourselves) after I had sent them a reminder. The Swiss excuse was the most fascinating one: Due to the September 11th catastrophe, we are all experiencing difficulties ...
If you want to work for them again, grin and bear it. If you don't try the following: send them a fax every day: "You owe me ... and you have not paid me for .... days despite the punctual delivery of my work.". You may even send two or three faxes a day. This method has worked for me - within less than a month after I started the exercise, I got the money. They don't like to be embarrassed ...


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baroni  Identity Verified
Local time: 07:56
Member (2004)
English to Italian
+ ...
TOPIC STARTER
Answer arrived Feb 6, 2005

Thank you!

I was very clear with them: "I will start to translate your text ONLY if you give me precise payment terms."

I waited for they answer 2 weeks and nothing happened, therefore I sent them an e-mail where I told them I refused to work for them. They immediately sent me an e-mail where they confirmed my payment terms...now I am translating their text. Let's see!

By the way, the only method to get paid by bad "Swiss" customers is the "Betreibungsamt". A Proz member suggested it to me some months ago, and it worked! (10 days later I had my due amount on my account, PS: Thank you Laura C. if you're reading this forum!).

Liebe Gruesse
Francesca


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TTilch  Identity Verified
Local time: 07:56
English to German
+ ...
The payment of your work does not depend from the payment of your client Feb 8, 2005

Hello,

Your contract is with your client. According to German law you are entitled to your payment after you have delivered your work and after it has been accepted by the client. **There is no need for you to wait for your getting paid until your client has been paid by his client - that's his problem alone.**

I think that your proposed term of 60 days is more than fair and that this should allow your client to collect his payment first from his client. Usually, payments are made within 14 to 30 days in Germany.

Best regards,

Tanja


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