Legal Question in Business Law in California
We recently discovered that a vendor has been invoicing us for an amount less than the contracted amount. We have paid all invoices. What is our liability?
2 Answers from Attorneys
You are generally liable for what you agreed to pay. The only exceptions would be 1. for under-payments that are more than four years old on a written contract or more that two years old on an oral contract, and 2. if the facts and circumstances establish that the vendor has knowingly waived the right to collect the balance. A vendor's mere oversight in billing does not create a right to breach a contract by not paying what is agreed.
Why not contact the vendor and have a discussion about the discrepancy? Maybe you haven't calculated the amount due properly. If you do owe more, you should pay it, but I think it's good business to find out whether the 'discount" is an oversight or perhaps intended based on the vendor's interpretation of the contract and its performance.
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