Providing services to a company in administration

carlsagen

A client is 20k+ in arrears for a number of services I provide them and have just gone into administration. Ive turned off all but one service so I'm not spending good money over bad. these services are internet connectivity and cloud/email services. left them with email (low cost). 

The administrator is threatening me with a solicitor if I don't turn it all back on which they have said they will pay for moving forward while they wind the company down. I don't want to provide them with anything (unless they settle the 20k debt) and instead have offered a backup of their data and access to their cloud portal to pay direct with a credit card. As far as I understand I am under no obligation to continue to provide them with any services moving forward as this legislation only applies to utility companies (water, gas, electricity etc) and not a small 2 man consultancy firm? 

I would much prefer to spend my time with customers that are going to pay and get me out of this hole than with these sharks. 

If someone knows and could offer any advice id appreciate it. 

Savvy_Sue

This is not something I have any direct experience of, but the bottom line is, what does your contract / terms of engagement with this client say? 

Did you have these terms checked by a solicitor before you started using them? If you did, a quick phone call might put your mind at rest. (If you didn't, I'd get them checked now. This isn't something you can afford NOT to do ...)

carlsagen

Standard sales terms that say title doesnt pass till paid for in full. interest will be added at x % above base rate for anything beyond the agreed 30 days terms. so thats been going for 60 days now. administrators won't entertain the old invoices so thats pointless. 

Its a bit harder with digital services but we did have a solicitor draw up contract terms for such things. the solicitor specialised in our industry. 
Extract below. 

4. TERMINATION

If the Customer breaches any of these terms and conditions [OUR COMPANY] shall be entitled to treat the same as repudiated without prejudice to other rights and remedies in respect of such a breach. Any indulgence by [OUR COMPANY] in respect of this paragraph shall not be deemed a waiver. [OUR COMPANY] reserves the right to terminate the Agreement forthwith without prejudice to [OUR COMPANY] other rights in the event of any proceedings voluntary or involuntary against the Customer in bankruptcy or insolvency or in the event of the appointment of a receiver of any of the Customers assets or if the Customer should make any composition or arrangement with its creditors. 


5. TITLE AND RISK IN THE EQUIPMENT

(a) Risk in the products shall pass on delivery, but title and property therein shall not pass until the purchase price has been paid in full.

(b) Until such payment the Customer undertakes to mark or otherwise identify the products as being the property of [OUR COMPANY] and hereby irrevocably authorises [OUR COMPANY] to enter upon the premises where the Products are kept from time to time for the purpose of repossessing the same in the event of termination of the Agreement by virtue of non-payment of the price or otherwise.

(c) [OUR COMPANY] may maintain an action for the price of the Products notwithstanding that title to the property in the Products may not have passed to the Customer.

DullGreyGuy

A solicitor used the word indulgence in a UK contract? These read like a stock set of US terms that have just had the blanks filled in and poorly given they are for a B2B contract selling physical goods but you say you were giving digital services. 

Ask your solicitor, you paid them to draft the terms and their PI insurance is on the line if they have drafted unenforcable terms. 

The administrators may also be trying it on a little... they've certain duties and if the company is allowed to keep trading then ahving their website up etc is going to increase the prospects of turning it around etc. 

Mistral001

If the Administrator is willing to pay you for keeping the internet services running, then I cannot understand why you do not want to do that.  You will not be losing any money more money, will you?.  If you are going to lose money, then you should bring this to the attention of the Aminstrator as they might pay more than they are offering if you detail all your costs involved.  I assume that you are a creditor of this company and if by your refusal to keep these services running will any any way reduce the amount that you and your fellow creditors will get then you could lose money money by your refusal and not be too popular with the other creditors.  

Grumpy_chap

The arrears of £20k are on matter and the OP will simply be one of the unsecured creditors in that regard.

The ongoing service is a different matter.
Is the Administrator underwriting the on-going costs?  

macman

You can't be 'threatened with a solicitor' unless you are in breach of contract. So, the question is, has the customer already breached by virtue of non-payment, and, if not, are you in breach by terminating the service?
for £20k+, you really need to be taking professional legal advice on your options.

lincroft1710

macman said:

You can't be 'threatened with a solicitor' unless you are in breach of contract. So, the question is, has the customer already breached by virtue of non-payment, and, if not, are you in breach by terminating the service?
for £20k+, you really need to be taking professional legal advice on your options.

In any case, a solicitor has no power to compel you to provide the service. They can only send you a letter saying that if you do  not provide the service, legal proceedings will commence, and a judge may not agree that you have breached the contract.


But as macman says you need professional legal advice, a solicitor specialising in contract law