When we onboard a new client, one of our first tasks is to review their contractual language… specifically, their payment terms. After all – if your contract’s payment terms aren’t rock solid, and agreed to affirmatively by both parties, our ability to collect the owed debt can be hampered. So how do you know if your contract is binding, and you have a case when a debtor refuses to pay? Keep reading!
Your Payment Terms Can Influence Your Chance at Debt Collection
In the event that your debtor contests your decision to collect their debt, and lawyers up, the very first thing their legal team will do is to comb through your contract’s payment terms with a fine-toothed comb. If the contract contains language irregularities, missing clauses, overly broad or unenforceable language or terms, you can bet they’ll find it
How Do You Know If Your Payment Terms are Enforceable?
Start Off on the Right Foot
The easiest way to be sure that your payment terms carry the weight of law for noncompliance is to hire a business law firm to write them from the get-go. Attorneys like the business law team here at Gilliam & Mikula have decades of experience in business law contracts and would be happy to create an iron-clad set of payment terms to include in your contracts.
That can be a big ask for a startup, self-employ, or small business, but trust us when we say that the upfront cost of having seasoned professionals create your payment terms is a drop in the bucket compared to potential future losses incurred by a DIY contract.
If that describes your business – the best time to act is right now, before you send out one more contract. Contact a business law attorney immediately to verify that your payment terms are enforceable, and if not, update them as soon as you can.
Your Signature, Please
Sometimes, the simple things are the most overlooked. Even the most rock-solid payment terms can be rendered null and void in cases without an affirmed signature. While verbal contracts are enforceable in most cases, having it in writing, with express consent from the other party, is the way to go.
In the case of digitized contracts, checkboxes are okay… but signatures are still king.
Finally, be sure that you held up to your part of the contract before calling in the debt collectors. We’re not casting any doubt – but you can be sure that if it comes to litigation, the debtor will do their best to do just that.
Your payment terms should outline the specific deliverables your business will complete, and what the client can expect from you, in clear terms.
Do You Need Consultation on Your Payment Terms? We Can Help!
Gilliam & Mikula is a debt collection agency – but as we’ve written about before, we’re a bit different than most. We are attorneys, and on top of being able to leverage the legal system to get you what you’re owed, we offer a number of other services – including business legal consulting.
If you’re concerned that your payment terms are too lax, or unclear, or unenforceable – we are uniquely capable of serving two important functions for your business: we will insure that your contracts are airtight and enforceable, which allows us to actively pursue what you’re owed to insure that you’re paid. Not many other debt collection agencies can say that!
If we can help, get in touch! Please fill out the form below and we will be back in touch with you shortly.
Gilliam & Mikula is centrally located in Richmond, Virginia, and serves clients throughout the Commonwealth of Virginia. Our attorneys have over forty years of combined experience in various practice areas, representing individuals and businesses. We are licensed to practice in all General District Courts and Circuit Courts of the Commonwealth of Virginia including, Central, Tidewater, and Northern Virginia areas.
The attorneys at Gilliam & Mikula are here to smoothly guide you through the “legal maze” and ensure that you achieve the most favorable outcome.
The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.