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  • On Client Agreements, Mr. Green, and Payment Enforcement

On Client Agreements, Mr. Green, and Payment Enforcement

by Guest Blogger | November 2nd, 2020

 

 

Emanuel Weisgras

 

 

I’ve said it a million times. An oral agreement ain’t worth the paper it’s written on, and nothing is obvious. Perhaps I’m being too subtle. Get it in writing.

 

Every now and again (and usually, several times a year), a colleague will turn to me and ask me how to get a recalcitrant deadbeat client to pay. (In legal parlance – Mr. Green won’t come in for an interview.) My answer: Next time, get it in writing. I’m not saying I’m perfect. Like many, if not all of you, I also have several regulars with whom I’ve fallen into a routine of sending a quote, they approve, we deliver, and at some point – they pay (often after a gentle reminder or five). But what about those annoying, often small scale and/or one-off jobs for clients, or new clients (individuals, small businesses, etc.) with whom we haven’t built a relationship of trust (and payment)? Get it in writing! (OK, I prefer you get paid up front but that’s hardly common practice.)

 

Putting the commercial terms of any agreement into writing is always the best practice. (And every time we send a quote and a client accepts, we in fact have an agreement, by definition.) Putting the commercial terms of an agreement into writing is so important professionally that the International Organization for Standardization (ISO) international standard on translation services – ISO 17100:2015, has dedicated a whole section to it (§ 4.4 – Client TSP Agreement and Appendix B – Common Commercial Terms for inclusion in a written agreement). It’s a mandatory part of the translation process for certified/compliant LSPs and/or TSPs.

 

A written agreement ensures that both you and the client are on notice regarding the material elements of your project agreement, including payment amount and terms. Get in in writing!

 

OK; you get my oh-so-subtle point by now, right? So let’s take it a step further and add a local twist. Don’t just get it in writing; get it signed and in writing.

 

Whenever we are in that uncomfortable position of having to choose whether to threaten to sue a client for payment, we are confronted with all this this entails (small claims court if possible, the risk of reputational damage if the client counterclaims or makes defensive claims that the work was inferior and that’s why they didn’t pay, even if it’s completely false, etc.). Alternatively, we can simply throw in the towel and write it off, hoping to avoid such clients in the future.

 

But, there’s another way! If getting it in writing is the gold standard, getting in writing and signed is the platinum standard. Why? Glad you asked!

 

Israeli law has a unique mechanism for enforcing agreements for payment of a defined (or easily ascertainable) amount when you have a signed written agreement (הסכם על סכום קצוב). It’s a name that strikes terror in the hearts of mortals, and with good reason: הוצאה לפועל.

 

Israeli law provides for a summary (shortened) proceeding to collect a contractual debt for a defined amount and there is no automatic right to defend against it if you meet the criteria: A signed agreement for a fixed (or easily ascertainable) sum, signed by the other party (the debtor). The penalties for not paying include statutory interest and legal fees. Few people want to risk this, especially if they don’t have a really good defense against such a claim. (For more information on the process, see the Kol Zchut site’s page on the subject.)

 

But wait! You’re thinking, ‘But I don’t have the time or resources to write an agreement for every client!’ But you’re wrong; you most certainly do. What constitutes an agreement is simply an offer + acceptance. Put it in writing with at least the basic terms (i.e. the service provided, delivery terms, amount due, and payment terms as well as any late-payment penalties), and make sure the client signs it and sends it back to you. (If it’s a business, it should be someone of managerial authority and not a clerk or secretary.) In my case, my business’s billing software allows us to generate work orders which we will often send to clients and request a signature and, if applicable, a stamp. If you don’t have this available in whatever software you use (if you use such software), there are several easy and suitable templates you can download online.

 

This quick ounce of prevention will often be worth several pounds of cure.

 

So remember (in case I was too subtle): Get it in writing and get it signed.