What actions/steps can I take in a situation where a company doesn't uphold the terms of the contract? Background: Last month I concluded a contractual work for a firm and as per the agreement the invoice settlement was due two weeks from the day the invoice was raised. It has been more than two weeks now, but the invoice has not been settled. I am following up with them regarding this issue, but yet to hear a response. I am (mostly) sure that it will be resolved without further delay, but I wanted to know my possible options in case this thing goes south.

Hi Shaksham, I know it can be upsetting and I have been there many times. I hope it gets settled. Cost of doing business = things being delayed and I hope you had taken an advance or something. As to what you would like to do if it isn’t, depends. Especially on how much money is at stake. And how much you are willing to fight / burn bridges, etc. You’d probably need to approach a lawyer and check the validity of the contract and what you could possibly do. At the very least, you could probably send them a legal notice (costs a few thousand) and then worse case, file a court case. It will be a civil case which will take years. If they are not paying you because they are not happy with the work, there is always arbitration (if it is there on the contract). Keep in mind that Time = money And, peace of mind is even more important. I have been part of a team that has filed a case in India against another company (and won) — but if you ask me if it was worth it, sadly it wasn’t. Wouldn’t do it again unless my life depended on it.

Thank you for sharing the experience @loud-glass-33663 🙂 As per the contract, the remuneration is to be payed once the work is complete, so I didn't have any advance payment. The payment is approx. ~20K. I am hopeful that things would not go to such an extend as to take a legal action, but it's good to know. I had a couple of such experiences earlier too but that was a different firm. However, the pay was settled without taking any serious steps in that case.

If this is happening regularly for you, it might make sense to contract via a mediator — like Upwork’s (Bring your own Freelancer) or something. In which case atleast your money is paid upfront and is safe. Once you get a good feeling about the client, you can work outside of Upwork. You may lose about 5 - 10% but it is sometimes worth it. The other thing ofcourse is to take an advance. Usually it is 25%. Not easy when starting out — but these things will spread your risk with contracting. I have rarely ever contracted personally directly with a company (always via a mediator agency) - so don’t have a lot of experience on that front with regards to payments. But @hundreds-winter-88791 should be able to share some tips as well here on what you can do this time / next time.

For the future, always structure payment against SoW milestones. e.g. Advance @ project kickoff - 25% Design complete and approved by customer - 25% Working MVP - 10% Acceptance tests complete - 30% Final settlement - 10%

Thank you for your valuable inputs, guys. I appreciate it 🙂 🙏 In my case, since the contractual work is mostly around mentoring/teaching, I am unsure if the breakup structure will work. However, I will discuss it with the firm and see if it's possible to "negotiate" the pay structure.

Like I've said to all my clients that ask for "pay-after-work" structures - I'm not in traditional supply-chain business with 90 day credit, delayed deliveries, constantly needing to ask for money. If they are looking for that, they should talk to their nephew/niece who is finishing their engineering degree. 😉 Here is how I would break up a teaching contract into milestones: • Split training into 3-4 modules. • After each module, have a test. • Align a payment after each test and provide them with a nice report card and areas to improve.