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A Typical Contract Dispute

November 2012

 

Here’s the story

ICA member and independent contractor, Domenic (we’ve changed his name), came to us with a contract dispute. He’s owed money by a client. He worked on a commission arrangement selling real estate and seems to have been successful. When he left a business he worked for he was owed money on sales he’d made, but commissions weren't paid until the transaction with the homebuyer finally went through. (That’s fair enough!)

Domenic’s supplied us email correspondence with the builder that clearly shows the builder accepted that commissions were owed to Domenic. (We’ve changed the name of the builder too.) After almost 12 months of correspondence, however, the builder says a clause in the contract means he no longer needs to pay Domenic. (Check emails 9, 10, 11 below)

ICA Comment

Domenic’s situation is quite common. The cost of fixing the dispute through the courts is too expensive probably to warrant taking action. This is why fair contract laws  are needed to stop bad contracts and people should make use of the small business commissioners.


1) From: Domenic
To: Albert
Sunday, April 2011
Hi Albert
Can you please send through my commission statement, as we discussed on my exit from your business. There is commission outstanding which I have full records of.

2) From: Albert
To: Domenic
Monday, April, 2011,
Here is it Domenic
No commissions for April but given the (A) clients should be settling land in the next couple of weeks and the (B) client in early May, there should be commissions payable in May.

3) From: Domenic
To: Albert
Tuesday, 19 July 2011
 
Hi Albert,
How's business?  Could you please give me an update on my outstanding commission balance(s).  When they are likely to settle, what's owed etc.

4) From: Albert
To: Domenic
20 July 2011

So in summary.
We have paid you a refundable retainer of $34,000.
If every live job of yours above went to site, we would have paid/will pay you $37,000

5) From: Albert
To: Domenic
Wednesday, 20 July 2011,

Hi Domenic
All is well here. I’ll give you a summary. The table below is a summary of all jobs you took a deposit on.
The jobs highlighted in blue have cancelled (I’m sure you’re already are aware of these as they were cancelled jobs before you left.)

6) From: Domenic
To: Albert
2 November 2011
 
Hi Albert
 
Hope you are well.  I noticed George is working for you guys, say g'day for me.  I'm still up here in Qld.  Just wondering if the final commission on the additional sold land is payable yet?  Can you please update me. Below is the sales spreadsheet.
 
Regards,
Domenic

7) From: Albert
To: Domenic
3 November, 2011

Hi Domenic
Stage 3 at ….. is titling only in March 2012 so I’d suggest diarise to touch base with me in March 2012 again.
Rgds
Albert

8) From: Domenic
To: Albert
27 March 2012
 
Hi Albert,
Apparently Stage 3 at ….. has titled. Please find attached a final invoice for Lot 348.
 
Regards,

Domenic.



9) From: Albert
To: Domenic
27 March, 2012,

Hi Domenic
You’re 100% correct -this morning we were advised by phone that land had titled (it’s not yet on land data, but we’ll take the developer’s word that it has titled).
However I’d like you to review your agreement, specifically Schedule 3 Item b) and advise me if you still believe that commission is payable.
I think we might have a problem here where the job has not become a converted sale and more that 6 months has passed since the termination of the Independent Contractor Agreement.
Regards
Albert

10) From: Domenic
To: Albert
28 March 2012

Hi Albert
 
I have just received independent legal advice regarding the nature of my agreement with you.  Schedule 3 - item b is legally unenforceable and therefore I have been directed to the Small Business Commissioner (Vic).  If I do not have confirmation of your intentions to pay the outstanding invoice by close of business, Friday ……. the Commissioner's office will be in contact with your company regarding mediation and may elect to investigate your sub-contractor agreements in general and or take the matter to VCAT or a higher jurisdiction.  I look forward to a positive outcome.
 
Regards,
 
Domenic

11) From: Albert
To: Domenic
28 March 2012

Dear Domenic
So what you’re saying is that for the last two years, your contract was valid but now it’s not. We won’t be paying your invoice for several different reasons.
Anytime, it’s pointless sending more e-mails so here’s what I propose:-
1.       Lodge your case in whatever legal format you choose.
2.       We will respond accordingly.
 
Do not contact me directly again. Please direct all communication via your solicitor/lawyer and which point we’ll have our legal representatives respond.
Regards
 
Albert



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