Business to consumer debt

alumende27

Any advice please.

I engaged a builder to do some work a few months back. His quote simply mentioned the work to be done and the price. No mention of a deposit or any other charges.

About 10 days before starting he asked for 40% up front. I said I was unwilling to pay such a large amount up front based on past experiences. He said that was fine and he understood and would cancel the job. [I don't want to get into he rights and wrongs of charging a deposit up front. i understand some people expect it, and I can see it is acceptable depending on the circumstances, and materials and whatnot]

Shortly thereafter he sent me an invoice for 10% of the original quote price, and said he would charge interest at 5% weekly if not paid within 5 days.

I've now had 3 followup invoices in the last 2 weeks and he's duly started charging me interest at 5% a week.

So what's the position. My opinion is that a demand for a large deposit after work has been agreed is an unfair variation of the implied contract upon acceptance of the quote, doubly so for a cancellation charge that I only discovered when he sent the invoice. Is he allowed to charge interest at 5% a week?

At no stage prior to the request for a deposit was it ever mentioned verbally or in writing and likewise with the cancellation charge until I received the invoice.

paddyrg

It won't hold water, he's trying it on.

naedanger

dsdhall wrote: »

Any advice please.

I engaged a builder to do some work a few months back. His quote simply mentioned the work to be done and the price. No mention of a deposit or any other charges.

About 10 days before starting he asked for 40% up front. I said I was unwilling to pay such a large amount up front based on past experiences. He said that was fine and he understood and would cancel the job. [I don't want to get into he rights and wrongs of charging a deposit up front. i understand some people expect it, and I can see it is acceptable depending on the circumstances, and materials and whatnot]

Shortly thereafter he sent me an invoice for 10% of the original quote price, and said he would charge interest at 5% weekly if not paid within 5 days.

I've now had 3 followup invoices in the last 2 weeks and he's duly started charging me interest at 5% a week.

So what's the position. My opinion is that a demand for a large deposit after work has been agreed is an unfair variation of the implied contract upon acceptance of the quote, doubly so for a cancellation charge that I only discovered when he sent the invoice. Is he allowed to charge interest at 5% a week?

At no stage prior to the request for a deposit was it ever mentioned verbally or in writing and likewise with the cancellation charge until I received the invoice.

It seems to me you don't need to worry about the original dispute over whether or not a deposit was due since you both agreed to cancel the contract.

The question then arises over what terms were agreed regarding the cancellation. Unless you agreed to pay 10% then I cannot see on what basis he can possibly expect to charge this amount.

And he is certainly not entitled to charge 5% interest a week.

I suggest you send him one letter stating that the contract was cancelled by mutual agreement with nothing said about either party being due a cancellation fee. Therefore neither party has any right to charge a fee. And I suggest you state that if he disputes this then he should sue you, and that any further correspondence from him short of legal action will be ignored by you.

If you have any concerns I suggest you speak to Citizen's Advice.

PS I think you had a lucky escape. Imagine the problems if you actually used his services.

unholyangel

I'd maybe try a differently slightly approach as it doesnt sound like the cancellation was mutually agreed, it sounds as if the builder took matters into his own hands when OP wasn't willing to agree to the variation.

I'd write to him asking why he's trying to charge me a cancellation fee when it was him who terminated the contract because he wasn't willing to perform the contract under the agreed terms and I wasn't willing to agree to his unilateral variation of terms. I'd also add that should he continue to try and charge me for his breach of contract, I will be counterclaiming for all reasonable costs incurred due to his breach.

Although it doesn't appear as if the builder has complied with the Consumer Contract Regulations either - I'd fathom a guess that this trader is completely clueless about legalities - he's probably had a supplier to charge him for cancelling and doesn't realise you can't do the same with consumers.

macman

If he's trying to charge 260% pa simple interest, then his talents are wasted in the building trade-he really should be running a payday loan company.
Have you had a discussion with him to ask on what basis he justifies charging you a 10% 'cancellation fee'? His claim is ludicrous, just ignore it.

forgotmyname

Send him an invoice that matches his original price but charge double his weekly interest rate.

Time taken to find and interview another builder, phone calls etc to get the price to match.

Then one of the items in your invoice should be talk a neighbour out of using you for some building work = FREE.

Ensure non of my family and friends use you for any work = FREE

alumende27

Thanks for the advice all, I'lll write to him and see what he says, hopefully this will be the end of the matter.

alumende27

So this is still rumbling on, and latest email received from him this evening. His previous email said he'd take me to court but would be willing to go to mediation.

I said as far as I can was concerned I didn't owe him the money because he sprung the deposit on me after we agreed the work and he never mentioned a cancellation fee and if he wanted to take me to court then he should do so, and noted that as part of the small claims process mediation was an option available.

Anyway:

-=-
Interest on any outstanding invoice can be legally charged to a consumer if it is thought to be necessary and at a reasonable rate.
When agreeing to the works at the above property you did not ask for any terms and conditions to be attached to the quote and agreed a contract to have the works carried out without this information. Had you asked for terms of contract before agreeing to the works at the above property the terms and conditions would have been sent unfortunately this was not the case.
-=-

Can I assume he's still trying it on?

daytona0

dsdhall wrote: »

Anyway:

-=-
Interest on any outstanding invoice can be legally charged to a consumer if it is thought to be necessary and at a reasonable rate.
When agreeing to the works at the above property you did not ask for any terms and conditions to be attached to the quote and agreed a contract to have the works carried out without this information. Had you asked for terms of contract before agreeing to the works at the above property the terms and conditions would have been sent unfortunately this was not the case.
-=-

Can I assume he's still trying it on?

I'm not going to lie but interest can probably legally be charged on invoices if it is REASONABLE. But in this case it is nowhere near reasonable!! He has given you 5 days to settle the invoice and is charging 5% a week...

REASONABLE would be more like 1% APR (1% a YEAR) to reflect what he is losing out because the money isn't in his bank account generating interest (for a £10k job it would equate to £10 a year in your situation, factoring in the 10% deposit). He would also need to give you a fair amount of time (longer than 5 days).

So that's 100% a bullying tactic and (my opinion, not professional advice) something which would be laughed out of small claims court.


As for whether you actually owe the money; well this latest email (I hope its an email) is quite the revelation! He has flat out admitted that Ts and Cs were not provided in a durable form prior to purchase. He also implies that the Ts and Cs were not provided verbally (an admission you could potentially subtly get from him).

Unless he has a website, I think he has a super thin argument and, whilst you are never 100% to win, I think that you would win on the balance of probabilities here; no Ts and Cs were provided and as such he is trying to retrospectively apply them!

I would call his bluff here and take him on in small claims court. Best case scenario is that he gives up. Worst case is that he wins and you are ordered to pay 10% and some fairly small court fees (I don't think he'll succeed with his interest part).

That's what I'd do. Send a nice simply reply along the lines of:

Dear X,

I do not owe you this as we mutually cancelled the contract and no Ts and Cs were presented, as advised in your latest email. Your interest charges would also not be considered as reasonable. I will not respond to further requests for payment, however I will be more than happy to defend this case in Small Claims Court should you wish to pursue this further.

Kind regards,

xx

arcon5

Ignore him... you've made your position clear so no need for tit for tat. Let him decide whether he wants to go to court or not

Valli

Is this builder a member of any trade body or scheme?

If so they might be interested to learn of this!