Being asked for a cancellation fee I didn't know about

Hollie1985

I contacted a printing business for a quote for some personalised shopping bags. I went back and forth with them on the design and then they asked if I could approve the design, they would then send an invoice and I would have 30 days to pay. They sent over the invoice for 100 bags, however things took a turn for the worst with my business and then looking at the books it was something I couldn't afford to do. They chased and chased and they said today that there price only lasts for 30 days and I need to pay a cancellation fee of £65 plus VAT. I queried this with them as each email said that production would not start until full payment was made. They said that by approving the design this enters me into a contract and there very lengthy terms and conditions state that they can charge a cancellation fee. I have tried to argue the case as I have never know a company to order materials before an invoice has been paid and they are now stating I have to pay the full invoice or the cancellation fee. I have advised them I cannot afford to pay it and what happens next and they just keep saying I have to pay it. I don't know where I stand as I told them that if the email they sent asking me to approve the design had been transparent and said to me that by approving the design I would be entering into a contract which if not fulfilled will incur a cancellation fee then I would not have approved the design. I approved the design and asked them to send me an invoice. I knew the costings before hand (not the postage which turned out to be free) but things changed very quickly and I decided it wasn't something I could budget for. Any help would be massively appreciated

NBLondon

1) This isn't a consumer rights issue because it's business to business.

2) Is there anything in the e-mail chain that mentions the cancellation fee?  Did you see the T&C before you approved the design?

the_lunatic_is_in_my_head

Hello OP  

As a business OP you wouldn't have any consumer rights and it would depend on the terms of the contract. 

General position is costs or loss of profits and to be fair they might be able to award more than £65 (+VAT) to the design element so it's probably a case of pay or risk they won't bother seriously chasing £78.

If they do file small claims it would be wise to pay the £78 (probably + the £30 filing fee) rather than letting it go further, particularly if you are a sole trader. 

Out of interest how much is the entire order going to cost if you go through with it? 

elsien

Although they haven’t created the bags, they have spent time going back-and-forth with you and working on the design. In those circumstances I don’t think it’s unreasonable for there to be some reimbursement.
Do the terms and conditions reference this at all, as opposed to agreeing the full order?

Hollie1985

Just to answer the above. I made a query on the website and then received an email with a mock up. We went back and forth as he didn't quite understand what I meant. He then asked if the design was approved, and I said yes please send me an invoice. The T&Cs were at the bottom of the invoice however at this point I had already approved the design.

macman

A charge of £65 for VAT is perfectly reasonable for the costs they have already incurred in creating the design and proofing it back to you. A graphic designer is not going to charge less than £30 per hour, and you said it went 'back and forward' several times, so probably at least two hours work.
It's not really a cancellation fee, or a bill for materials, it's a bill for time already spent on the pre-press work. 
Why you think a modest bill for this is unreasonable is beyond me. Do you really expect them to not charge for time spent on designing the product that you no longer want?

Hollie1985

@macman and where I completely agree it was my logo on a bag, the reason I went back and forth is because he didn't understand me when I said I wanted a grey bag with my circle grey logo in the middle. He misuderstood me a couple of times. I wasn't made aware of these charges. They have come back to say that I should of read the terms and conditions before sending the enquiry via their website. Whilst I appreciate their time, these charges were not transparent. What would of happened if they charged £100 an hour? Would the expectation just be for me to pay? With my business we go back and forth with our customers about their order and they pay when they are happy. If at any point they change their mind before payment has been made then that's our tough luck and just how business is. What would of been the harm in telling me that there was a charge should I not go ahead with the design? Seems people hid info in their T&Cs nowadays to fall back on and rip people off. I have left it now it can't be enforcable with no agreement from me and me not paying the invoice. The business has chosen to purchase raw materials before getting confirmation from me and me paying the invoice? I wasn't aware that was how some businesses worked. I was only asking for some advice on here as I cannot afford to pay the cancellation fee.

TadleyBaggie

Doing working before the invoice is paid doesn't sound that unusual for a business transaction.

macman

How is it a 'rip off' to do several hours work for you and then bill you a very reasonable amount if you decide to cancel the print order you agreed? It was your choice to cancel, and your choice not to read the t and c's.
It is 100% enforceable, as a contract was clearly agreed, even if verbal only.
How can you not afford this? It's a legitimate business expense, fully allowable for tax purposes.
They didn't charge you £100 per hour, they charged you maybe a third of that, so why raise irrelevant points? The charge wasn't made because they 'misunderstood you', it was probably because you didn't specify precisely what design you wanted (which is always difficult without face to face contact),and changes were necessary-that's a normal part of the design process. 
For small jobs like this a design fee isn't usually charged separately, because they'll recover it out of the profit on the printing. So, if you subsequently decide not to go to press, they are perfectly justified in billing you for work to date. It's nothing to do with materials purchased.

the_lunatic_is_in_my_head

Hollie1985 said:

With my business we go back and forth with our customers about their order and they pay when they are happy. If at any point they change their mind before payment has been made then that's our tough luck and just how business is. 

It's good to have a customer friendly policy to encourage business but a contract can be formed without payment and once it is formed, assuming no right of cancellation, it's typically a claim of costs or loss of profit. 

I don't mean to sound impolite in anyway as I understand things are generally tough all round at the moment but £65 + VAT is a very small loss to suffer as business. 

You didn't mention how much the 100 bags would cost, if it's not much more than the cancellation fee going ahead with the order may be a more viable option.  

Manxman_in_exile

Hollie1985 said:

...They sent over the invoice for 100 bags, however things took a turn for the worst with my business and then looking at the books it was something I couldn't afford to do. They chased and chased and they said today that there price only lasts for 30 days and I need to pay a cancellation fee of £65 plus VAT....

That sounds as if you freely entered into the contract, got a 30-day invoice, but that they then had to chase you and chase you for payment because you hadn't told them you wanted to cancel?  At least if you'd told them straightaway they might have been able to reduce any losses they would make from your cancellation.  Doesn't sound very business-like.

I'm afraid your idea of how businesses work seems rather naive and innocent.

If I were you I'd just pay up to save further embarrassment.