Legal Question in Credit and Debt Law in Arkansas
Non-payment of Invoice
Three months ago our company sent a quotation to one of our longtime clients for an upcoming job. They requested that we source material from overseas (as it is less expensive). We sent a quotation based upon our overseas manufacturer supplying us material within a timeline that was suitable to our client ($170.00 per sheet). Our manufacturer then came back to us two weeks later and said that they couldn't meet the delivery date. We called our client and asked if we should A) Cancel order B) Source a higher-priced domestic material 3) Extend the original lead-time. They opted for (B), therefore we found a US manufacturer to supply a material at a higher cost than our original quotation called for ($189.00 per sheet). They verbally accepted. Now 80 days later they are saying that we are bound to the original quote, however that was for import not domestic (totally different material)and our cost for the US material is well of $180.00. How do we proceed with getting payment for the material we invoiced for, and they used? The total owed is well over $250K.
2 Answers from Attorneys
Re: Non-payment of Invoice
In order to fully answer your questions, I would need to review the documents that did, in fact, memorialize the sale. Without seeking the documents, however, the aggred price (the domestic) is likely the prevailing amount.
As this is a long-time client, I would recommend you seek to discuss the matter with a sales manager and explain what happened. If this conversation does not work, I would recommend a written letter to the sales manager and an executive in the company. A final option might be to sue.
I would welcome an opportunity to review the contract and provide additional legal services as needed to resolve this matter. Please do not hesitate to contact me.
Thank you and good luck.
Re: Non-payment of Invoice
Was the Option B ever put in writing, either by contract, letter, email, etc.? Even if not, it is possible that $189 would be the final price. Be sure and write down who negotiated the change in price, from your company as well as the person from their company that agreed to it.
You say this is a long-time client. You may want to try to work this out with them without the use of filing a suit. Is there someone higher up in their company that you have worked with (or someone from your company has a strong relationship with) that you could talk to, try to work out the problem with, in a pleasant but businesslike manner? If not, you might try putting everything in writing, including memos regarding the price change (even if the memos are just from your office). Send all that information to them along with a letter requesting payment.
Your last resort is always to file a suit against them to try to get them to pay. In your contract wiht them, is there any mention of where a legal action would have to be filed? If they are located in AR, I would be able to help you with the action. If they are located outside AR, you may want to contact an attorney in the state they are in. The reason you will likely want an attorney in the state they are in is that it will be much easier to sue and collect any award you may get.
A lot of this depends on how strong you want to go after them. Do you plan on doing business wiht them in the future? Will they have any trouble paying this, or are they in financial difficulties?
Please let me know if I can be of any help to you in the future, regarding this matter. I do collecting of business debts as a regular part of my business practice. I collect for a local construction business on a regular basis, as well as other type businesses.
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