Why Terms of Trade are Paramount
A roofing contractor carried out work for a developer in Wellington who failed to pay invoices totalling around $14,500.00, despite numerous attempts by the roofing contractor to obtain payment.
CollectIT was asked to collect the debt. The roofing contractor had a signed agreement with the developer which included terms of trade, this meant that interest and collection costs could be added to the debt. Eight days after CollectIT became involved, payment of $13,000 was received from the developer.
The developer refused to pay the balance, raising issues with three of the invoices and refusing to pay the interest and collection costs.
As our client, the roofing contractor, was legally entitled to charge interest and collection costs and the issues in regards to the remaining invoices had been sorted, CollectIT arranged for the developer to be served a statutory demand for the outstanding amount.
Once the statutory demand was served the debtor realised that their company could be put into liquidation and so paid all outstanding monies.
All costs were paid. CollectIT’s client was ecstatic to get their money and it cost them nothing. They have continued to recommend CollectIT to their network of business acquaintances.
18 months after this successful collection, the developer was made bankrupt owing $5.6million to a finance company. If our client had not pursued this overdue money using CollectIT, there is a high chance they would have got nothing.