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State agency is asserting that after an invoice from an Independent Contractor is turned in after 30 days 15% will be withheld from the total & after 60 days, not paid at all... is this even legal!? I am in the state of NM, USA.

My contract came this past week and in the "Compensation" section, it states that "Contractor must invoice __ within thirty (30) days of completion of the assignment. Later billing may result in reduced compensation and or no payment. If the invoice is not received within thirty (30) days of the service date, a fifteen percent (15%) reduction of the total invoice amount will be subtracted. If the invoice is not received within sixty (60) days of the service date, the invoice will not be paid."

Last fiscal year, the 15% reduction was added into the contract without bringing attention that the contract has changed from previous years and I signed it that way, not fully reading it since it "looked like previous year's contracts" which is MY bad! I own that... but now this fiscal year they are adding the 60 day stipulation that invoices not turned in by 60 days don't have to be paid at all. I know if I sign it, I am agreeing to it, even if I did not know the contract had initially changed. BUT can a state or any agency even do this sort of thing when services were rendered and are due?

Last fiscal year, after the 15% reduction change I learned the hard way after I had turned in an invoice a few days after the 30 day mark and it was reduced 15%. I have tried hard to keep up with my invoicing but there are times when I am out of town or it is an especially busy season, that I fail to meet the mark. I think it is way too harsh but can anyone answer if it is legal or if I have any recourse to recover monies that were withheld?

closed as off-topic by Philip Kendall, gnat, HorusKol, Sascha, Jonast92 Jun 11 at 10:43

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    No, it's not okay where I'm from, but where are you from? – Nathan Cooper Jun 11 at 6:32
  • A friend sorted late payers by giving a 10% discount if paid within 10 days of the invoice date... Worked very well - he added the 10% to the initial invoice value as he created it so, only the habitually late payers paid the 10%, covered the interest charges... – Solar Mike Jun 11 at 6:42
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    Illegal in Netherlands. Send another invoice for the remaining bit, add a fine + administration costs. You need to add a location tag. – rkeet Jun 11 at 7:04
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    For legal questions, you should post on law.SE. – ChrisR Jun 11 at 7:56
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    Honestly, why is it so difficult for you to submit your invoices in a timely manner? Are you really that busy? If so, why not use a third party to handle your invoicing for you? – joeqwerty Jun 11 at 11:45
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Yes - probably.

Depends where you are; there's no location tag.

But (as you say) you agreed and signed it, unless there are overriding laws, for example employment laws (which won't apply in this case, as you're independent).

Lesson - carefully read all contract documents, extension or otherwise.

Is this a one sided agreement, or are there clauses covering late/non payment?

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    This is the answer. Once you sign something, that is a powerful weight against you regardless if the contract is enforceable or not. – Dan Jun 11 at 17:57
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    There are almost certainly overriding laws. The contract says they get something for nothing just because of the timing of an invoice. – Andy Jun 12 at 22:03
  • @Andy, is that also not true of late payment clauses, incurred losses aside? – Justin Jun 13 at 8:31
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    @Justin There is or can be harm to the invoicer if the invoice is not paid in a timely fashion; they presumably paid money up front in anticipation of the customer paying their invoice. In this contract, the invoicee is not out anything if not invoiced in a timely manner; indeed they may earn additional interest on money in the bank. What exactly do you think justifies keeping receipt of the good/services invoiced for without paying? – Andy Jun 13 at 23:26
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    @Justin Cash going out at a slower rate won't screw up the cashflow, that just sounds ridiculous. Even if we go by that logic, the intent of the contract (receiving an invoice quicker) does not lead to "bill us no or bill us never." The quote in the OP is literally after 60 days they will refuse to pay any amount on the invoice. – Andy Jun 14 at 22:42
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You are asking the wrong question. You should ask what to do in this situation.

I recommend you take the contract, strike through the passages you don’t like, and sign and return that. Then you’ll see how serious they are, they might not even read the contract.

And you send all invoices the day they are due. If there is a payment they refused you go to the small claims court. Since you don’t mention the country, you might ask a lawyer if kidnapping the head of a state agency is legal in your country - next time add your location.

  • Although in theory, striking through the passages you don't like would seem to be the way to both have your cake and eat it, in practice I think it's far more likely that the state agency will simply continue to behave as they please, as if those passages were still agreed to and in force. Then, again in theory, you have the option to take the agency to small claims court - where they may not even bother to appear. So you think 'Great! A default judgement in my favor!'. But even if it does go that way, now you have to try to actually get this judgement enforced - against a state agency ... – brhans Jun 11 at 12:07
  • Also I dont think a striked through clausule would hold up in court. As there is no way to determine if they were striked through before the signing or at a later date. – Maarten W. Jun 11 at 12:13
  • Or they might just refuse the amended contract, and give the job to someone else. – Simon B Jun 11 at 16:37
  • In the UK, you send in bailiffs. They have the force of the police behind them, and they will collect anywhere. Including a state agency. Actually, they will particularly enjoy collecting from a state agency. At least they have collected from banks. Went to a branch, straight to the teller, and told him how much money they wanted. Like bank robbery, just legal :-) – gnasher729 Jun 12 at 22:45
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    @MaartenW. If they don't have a contract with my signature and without the clause striked through they have lost. Or do you think they tell the court "No, we did strike it a week later, but we didn't mean it, honest, gov!" – gnasher729 Jun 12 at 22:47

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