cfmonk Posted April 23, 2012 Share Posted April 23, 2012 Hi All, We've ended up in an odd situation for us. We had a last minute job confirm on Friday for the a Film Festival. Big job, about £16k all told with about £7k of hired in plant etc. I did not do anything about it until I got the PO through and then started booking kit in (generators, heras, water bowsers, security etc.) I got an email this evening at 1900h (can't tell you how annoyed I am that they didn't have the decency to call me) saying that they have had to postpone it due to bad weather. No deposit had yet arrived, where do I stand? I'm exposed for between £1000 and £4k depending on how nice my suppliers choose to be... Any thoughts / advice? Current thinking is to find out exactly how much I'm going to get stung for and then ask them for that + a bit for the 20 odd hours I've spent on the job so far... Link to comment Share on other sites More sharing options...
timd Posted April 23, 2012 Share Posted April 23, 2012 The answer may well lie in any terms exchanged in the process, presumably you supplied them with your terms along with the proforma, which ought to contain some details of what will happen in the situation (I know that's not much use now). Generally though, once you've accepted the PO, you could recover at least any costs incurred through the courts should that become necessary. Link to comment Share on other sites More sharing options...
IRW Posted April 23, 2012 Share Posted April 23, 2012 Hi All, We've ended up in an odd situation for us. We had a last minute job confirm on Friday for a Film Festival. Big job, about £16k all told with about £7k of hired in plant etc. I did not do anything about it until I got the PO through and then started booking kit in (generators, heras, water bowsers, security etc.) I got an email this evening at 1900h (can't tell you how annoyed I am that they didn't have the decency to call me) saying that they have had to postpone it due to bad weather. No deposit had yet arrived, where do I stand? I'm exposed for between £1000 and £4k depending on how nice my suppliers choose to be... Any thoughts / advice? Current thinking is to find out exactly how much I'm going to get stung for and then ask them for that + a bit for the 20 odd hours I've spent on the job so far... I suppose the first question is do you have a signed contract with the company, and what does that say about cancellation? Edited to add- If they've just 'postponed' the event due to bad weather, that implies that they are still planning on going ahead with it when the weather cheers up...is there potential to alter the dates with the suppliers? Link to comment Share on other sites More sharing options...
cfmonk Posted April 23, 2012 Author Share Posted April 23, 2012 Nothing signed but I'm reliably informed by my lawyer chum that signing doesn't matter. A contract involves an offer, an acceptance and a consideration. The consideration is yet to be paid... Suppliers might be able to change the date but we can't really. We're pretty much full from next week through to September! Chris Link to comment Share on other sites More sharing options...
Jivemaster Posted April 23, 2012 Share Posted April 23, 2012 Could also revolve around who accepted who's contract as to who's conditions and terms apply, Accountant and solicitor time, with consideration for whether you want their next year's business. Link to comment Share on other sites More sharing options...
kerry davies Posted April 23, 2012 Share Posted April 23, 2012 Evening Chris. A purchase order contains the details of the type, quantity and price at which the specified products or services are to be supplied, along with other terms and conditions and the time at which the supplies are to be made. Acceptance of a purchase order by the seller constitutes a legally binding contract between the buyer and the seller. It depends on the detail in the PO as to precise conditions but if I got a PO it stated what I am supplying, for how much, during what period (say a season) and to what standards they wish the service/goods to be supplied. Cancellation clauses differ but I used to state that up to the first day of service it was 50% and after that date 100% of contract. They can't just postpone things without your agreement once a PO has been issued and accepted. If they rang to confirm at which time you accepted their PO then they are liable in law not only for your expenses and debts but loss of profit from the work. As Jive says there may be another agenda but that does not mean you should be one penny out of pocket once a legal contract exists. Be nice to begin with, always pays to be polite before sending the lads round! Link to comment Share on other sites More sharing options...
cfmonk Posted April 24, 2012 Author Share Posted April 24, 2012 Thanks all. I've just sent a very polite email expressing my disappointment and also pointing out that if they had hinted to me this was a possibility then we could have held off confirming sub-contractors until today. I explained that I assumed they have insurance to cover the costs of postponement and I would tot up my costs today and send over a revised invoice. Seems fair enough, I won't be profiteering out of it but I'm not going to lose money! The PO quite clearly shows the schedule of goods to be supplied and the total price for those goods, the date of delivery and the date of collection. We then issued an invoice for the amount (i.e. acceptance of the PO). Cheers, Chris Link to comment Share on other sites More sharing options...
bigclive Posted April 24, 2012 Share Posted April 24, 2012 To me a PO (Purchase Order) is an order. So I think it's perfectly reasonable for you to recoup costs involved in part fulfilling it, even if it was cancelled. Link to comment Share on other sites More sharing options...
Simon Lewis Posted April 24, 2012 Share Posted April 24, 2012 All of the replies are sensible and state what might reasonably be expected. However, it may be worth checking the terms and conditions specified in the purchase order. I know of some businesses that have extremely one sided terms, included the stated right to cancel an order (even after goods have been delivered) with no cost penalty to themselves. Their terms are deemed to be in effect if the supplier accepts the order. I suspect that such a one sided contract might be subject to a challege in court, but few of us have the financial clout and time to spend fighting unfair contracts. As usual, it's all in the small print.... Link to comment Share on other sites More sharing options...
indyld Posted April 24, 2012 Share Posted April 24, 2012 I am not a lawyer and dunno what the legal definition of a PO is, except to assume that there probably isn't one. Such is law. In my experience, a PO was/is a commitment to that particular thing including the consideration - I assume in legal terms, a contract. It's the agreement from the other party, following the offer on the suppliers part. Both sides have agreed and this is shown in the quote and resulting PO being exchanged. In terms of a cancellation, of course, you have not had to supply your offer, therefore you are looking at cash you have committed/spent plus opportunity cost incurred (which is pretty hard to determine but is often argued to be 100% of the "services" cost, certainly always was for a freelancer) but not including specific cash costs that would only be incurred, had you had to supply, such as diesel. What started happening was that clients keep freelancers on a "pencil" right up until the load in, therefore avoiding any need for pesky POs and leaving the option of a £0 cancellation. POs weren't issued, often because the client hadn't had a commitment from their client etc etc. and the freelancers is the bottom of the pile. In a tight work environment, a nod and wink is good enough set against the possibility of no work that day, and most of the time it worked out fine. I have on occasions had clients pay the full PO, despite a cancellation, as they were committed and their client was too. Also, as has been mentioned, if insurance was involved such as an incident that prevented the planned show going ahead. More often, I've had gigs cancelled with no firm booking, no PO or other paper trail and no recourse other than to curse the life of a freelancer and tidy the garage. Freelancers in the last ten years have found, if you try to put the screws on people to honour booking and POs etc. they just stop giving them out. :-( Link to comment Share on other sites More sharing options...
Andrew Edwards Posted April 24, 2012 Share Posted April 24, 2012 I was under the impression that a PO was to allow organisations to authorise and track purchases. Sally Shopfloor would raise a PO, which is then signed by Billy Bossman. This would then pass to Polly Purchasing to make the order. Some organisation may allow Sally Shopfloor to actually order once signed by Billy Bossman. A quick google has definitions stating that they are legally binding once orders have been accepted. However, I cannot see how this would trump any pre-existing Terms and Conditions of Sale/Service from the vendor or provider. Do your T&Cs have a cancellation policy? Link to comment Share on other sites More sharing options...
ramdram Posted April 24, 2012 Share Posted April 24, 2012 If your lawyer friend defined the "law" then he defined the "law". Ergo best left to the law to sort out. However, as hinted at above, if you did apply the law then the repercussions are that nobody (hyperbole of course) will use you in future because you actually wanted paying as per contract...the very idea...don't you care how much your client was losing...have you no heart? If you really do have a rock solid case and the outfit you were contracted to are solvent and not just an entity formed for this one event then certainly go for the throat. Why should you suffer as in underwrite their "losses" because of not having cancellation insurance type thing on their part? If these folk are not solvent then would it be worth it? You would have to pay the court fees and the legal fees upfront anyway...and even if you got a judgement would you get the money? Link to comment Share on other sites More sharing options...
TonyMitchell Posted April 24, 2012 Share Posted April 24, 2012 I haven't fully read all the posts in this one, so apologies if duplicating what's already been said, but keeping it really simple... The Purchase Order is essentially an itemised order/contract document generated by the purchaser, signed by/on behalf of the issuing body, which will be subject to their T&Cs, which will most likely include the right to cancel without liability. Whether of course that would stand up in Court, is another matter. The supplier's contract on the other hand will include your T&Cs, which will most likely include a cancellation clause and tiered charges depending on the notice given, pre-event costs incurred, etc. A PO is useful in that it proves the person with whom you are dealing is in fact authorised to deal on behalf of the company, which is particularly relevant assuming said company are the paymaster and are being offered credit facilities. But the supplier's contract is the most important document. I'm not saying you won't get anywhere in the absence of your contract being signed by the purchaser, however it will probably make any claim more complicated and costly. If it's in black & white, it's simpler for all parties and the party trying to avoid payment will think long & hard before tring to defend a summons. Link to comment Share on other sites More sharing options...
Jivemaster Posted April 24, 2012 Share Posted April 24, 2012 Interesting also could be the legal status of the expected purchaser. Company, partnership, informal committee etc and whether they actually have the capacity to pay. There is no value in incurring legal bills if there are liquidators already in. Link to comment Share on other sites More sharing options...
Pete McCrea Posted April 24, 2012 Share Posted April 24, 2012 As a side thought - if a confirmation is provided after the P.O. Has been accepted, stating that 'Job X is confirmed with the issues of clients P.O. Number 123, and that the confirmation is subject to the suppliers terms and conditions superseding all previous terms and conditions' going to help in a situation like this? I'm sure I saw something that basically it came down to whom ever 'issued' the last set of T&C's as to which applied. Link to comment Share on other sites More sharing options...
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