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Never paid, what next
3

Never paid, what next

Never paid, what next

(OP)
I had a client that paid on time for the first engagement, but for the next two engagements, basically ignored me and won't even return my calls. He's not a big company. Other than a demand letter and small claims court, should it get to the point where I give up, is there anything I can do to notify the parties that my work can no longer be relied upon due to non-payment? Such as notifying the building owners and the state's engineering board, public notice etc? I can't imagine that I'm the first PE who ever got stiffed, so any advice is helpful.

Thanks

RE: Never paid, what next

Do you have a written contract?

If you do, what remedial procedures do you mention in it?

Whatever you do, keep billing once a month to maintain your claim.

Mike McCann, PE, SE (WA)


RE: Never paid, what next

I can understand not doing more work for the projects where you didn't get paid. I'm thinking of construction services. The owner or contractor might be willing to pay you to provide construction services. Plus when you explain why they need to pay you for that they'll learn a little something about the person that hired you. Word will get around and that person might find it difficult to pick up new clients and new engineers. Especially if their client (assuming that is the owner) already paid them to pay you for construction services.

When you write 'your work can no longer be relied upon' are you saying that your design is no longer valid? I'm guessing you aren't saying that. Maybe you would want to re-word that.

RE: Never paid, what next

A lien on the property gets everyone's attention really quickly.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. Galileo Galilei, Italian Physicist

RE: Never paid, what next

As David Said try the Lien first. Then if you have decided to no longer do business with them , engage a lawyer.
B.E.

You are judged not by what you know, but by what you can do.

RE: Never paid, what next

(OP)
I have signed contracts. My contract language specifies what happens with late payments (interest accrues) and collections (fees are charged, including legal fees), but the fees on these two are low, less than $2500 each. I was planning on small claims court for the larger one, and just writing the small one off, but contacting the property owner (I was a sub to a prime environmental consultant) and letting him know I was rescinding the report's reliance due to non-payment (i.e. don't call me if you have any questions or if anything goes wrong with your building after the contractor is finished). This report was a structural condition report prior to a foundation underpinning job in support of some soil remediation work. And a lien won't work for me. My portion of work was six months ago. Too late for a lien in my state.

RE: Never paid, what next

StrucPatholgst (Structural)
Now that you have been bitten, you need to talk to your contract lawyer about modifying your contracts with insertion of language that states an express lien is hereby acknowledged to secure the amount. Then continue with the penalties for late payment. Some states will not allow a unilateral lien, but if the customer acknowledges that one exists by signing a document you have a better chance. This way the lien is in place from the beginning of the contract.
B.E.

You are judged not by what you know, but by what you can do.

RE: Never paid, what next

Start requiring a retainer. 'Nuff said.

RE: Never paid, what next

And don't give the client what they need until you get paid in full for your services.

Mike McCann, PE, SE (WA)


RE: Never paid, what next

(OP)
I did a retainer for the first job. I go from retainers to net 30 after the first job. About 90% of my work is from repeat clients (banks and investment groups). In the 17 years of being on my own, this has worked out fine for me. I've had two customers go bankrupt in all that time, and lost money on one of them. This firm I'm dealing with now is the first one to actually try to avoid paying an invoice while still remaining open themselves.

Also, I'm almost entirely on net 30 for commercial work, unless it's a new client (who is required to pay a retainer) or residential (where the homeowner is required to pay all of it on the date of the visit or at the time drawings are released).

I'm going to run this by my lawyer and insurer next week: rescind the reliance for the one report due to non-payment and ask that all copies be destroyed, and go to small claims court for the larger one. The client won't like me rescinding the reliance, because 1) the client's work hinged on my opinion (and I have a reliance clause in my reports), and 2) I am copying the property owner (whose copy will be mailed 10 business days after the client receives his copy). If he's smart he won't want that rug pulled out, just from a liability perspective, so I expect that invoice to be paid eventually. I also expect him to pay the smaller one once he gets notice from the court.

RE: Never paid, what next

Many years ago I got bitten by a customer wo paid cash on the barrelhead for product delivered from my shop, until he had established credit.
Once he was on net 30, he started slipping payments, a week or two at a time until he was about 90 days behind, any time you called him about it, he would promptly send a check for a few thousand, but not enough to settle the whole bill, but enough that you did not worry about him.
To make a long story short, he got out of the door with $25,000 worth of product, then switched suppliers, leaving me high and dry. He also then skipped town.
In the investigation as to where he was and what he was doing, we found this was a pattern with him, establish credit, get as much as possible without paying then skip to another state, and start again. He finally ended up in jail, unfortunately I was not the one who put him there.
This is why I am very leery of people who pay at first then slow down.
B.E.

You are judged not by what you know, but by what you can do.

RE: Never paid, what next

Is the guy out of jail now?

Just asking... laughtears

Mike McCann, PE, SE (WA)


RE: Never paid, what next

Reliance on your report is given by your signature and seal. Anyone who has a copy of your report will rely on it for that reason. Rescinding reliance does nothing. You'll find that out if there is any litigation with the project.

Small claims court has a value limitation so make sure you are within it, otherwise get a lawyer.

RE: Never paid, what next

I once sent out my documents printed on old sepia blueprint paper so they would fade away in a week or so.

RE: Never paid, what next

msquared48,
Yes unfortunately he got out in 2010. He was a very smooth talking sleezeball. I do not know what he is doing now, and I don't want to know.
B.E.

You are judged not by what you know, but by what you can do.

RE: Never paid, what next

My dad was an auto mechanic. Guys would pay cash for small jobs to build credit, then write him a bum cheque when they needed a new transmission or an engine job. By the time he sold the business he had a shoebox full of bad cheques. He tricked one guy into paying him, cleverly catching him with a fraudulent cheque and seizing his car with the tow truck, and the guy pulled out a wad of bills and paid in full. People that don't pay are often able to- they just find the world to be populated with enough suckers that payment is optional.

If your product can't be repossessed, keep a retainer against the last payment or expect to get ripped off and take your lumps.

Good luck getting your money back- hope the courts do something other than just waste your time.

RE: Never paid, what next

2
Star for molten.

My Dad was a gas appliance repairman.
He sold and installed a new furnace.
Presented with a bill, the client said he had no cash.
In lieu of the $300 (in 1950 money, when that was a lot),
that he was clearly never going to get,
Dad accepted something like 100 cases of Mission Brand Canned Peas,
which became a major part of our diet for years.
I still can't eat the damn things.

Mike Halloran
Pembroke Pines, FL, USA

RE: Never paid, what next

There seems to be a certain type of businessman ( If you can call them that.) that does not want to pay at the completion of a job.
I had a contract as a subcontractor to plastic particle strip and re-paint a C5A fuselage used as a training aid by the air force. Due to the size of the job I demanded progress payments. The guy paid every one until, ( you guessed it.) the last one.
B.E.

You are judged not by what you know, but by what you can do.

RE: Never paid, what next

(OP)
I sent a mildly-worded demand letter last Tuesday. Check showed up in today's mail. Case closed.

RE: Never paid, what next

All's well that ends well- until it happens next time. Consider extending your retainer period, either that or be prepared to take your lumps from time to time.

RE: Never paid, what next

Ah, yes.....who says we engineers ain't got no culture....MM quotes Shakespeare!

Congrats SP

RE: Never paid, what next

Et Tu, Brute?

Mike McCann, PE, SE (WA)


RE: Never paid, what next

One hard lesson I learned, Run a credit check, even on your good customers.
B.E.

You are judged not by what you know, but by what you can do.

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