Thanks for taking my question. I’m a huge fan of the column and enjoy reading your articles both in the print version of Fordyce and on fordyceletter.com. Also, although a bit unrelated, Placement Management is one of only 4 books I keep handy next to my desk. So suffice it to say I’ve been a fan of your advice and the straightforward manner in which you give it for some time. Wrote today because I have a Jeff’s On Call! question for you.
I have a company I’ve started doing business with. Sent the company my fee letter at the onset of the search, now a candidate has been hired and will begin in 4 weeks. The company HR & purchasing departments got involved toward the end of the interview process.
They have, subsequent to making an offer to my candidate, sent me their contract & agreement (which is 30 pages). They’ve accepted my fee percentage and are not disputing the fact a fee is due. However, because there are so many terms of their standard contract language I am still negotiating, it is likely the candidate will have started and an invoice become due prior to me executing their agreement.
The company has indicated that until I sign their agreement the candidate’s start date may have to be delayed. I’ve indicated that it’s irrelevant, and under my contract the fee is due at the time an offer is accepted (i.e. now).
Question is this: what are the legal principles at play here for me to notify the hiring company that (until a new agreement is executed) this placement will be invoiced under the payment terms in my fee letter, which we started the search under?
Stop Negotiating Or Be Estopped
I really appreciate your loyalty to TFL, and the that you’ve benefited so much from my work. The success of folks like you makes it all worthwhile!
Thanks, too, for your important JOC inquiry. Let’s get busy:
Since you’re a member of the Fordyce Family, I’m assuming you’re using our “Get Paid When The Candidate Accepts!” system. That will have your “payment due upon candidate acceptance” term consistent with your guarantee and other terms.
You mentioned that the client isn’t disputing that a fee is due pursuant to your fee letter. So negotiating the terms of its 30-page PSA (placement service agreement) is negotiating away your well-earned fee. Even worse — legally you’re waiving your rights under your fee letter.
A waiver is the voluntary relinquishment of a known right. It can occur either expressly (orally or in writing), or impliedly as here (by negotiating consistent with the voluntary relinquishment of the right).
The effect of the waiver is that you will be estopped (legally stopped or prevented) from asserting that contractual right of “payment due upon candidate acceptance.”
The clear path for you is to write the client a letter on your letterhead, unequivocally stating:
- A specific quote of the “payment due upon candidate acceptance” term, and any other provisions that apply (attorney’s fees, court costs, interest, etc.). (Enclose the signed fee letter if you like, although the client has already acknowledged acceptance of it.)
- A request for payment of the full fee (legally a demand) in a specific dollar amount.
- A date certain (deadline) when payment in full will be due. (Enclose that invoice if you like, but legally it doesn’t matter. The letter operates as the demand.)
- A willingness to cooperate in negotiating the PSA for future searches. (There’s no law against cooperating. Either you’ll agree or you won’t, so be optimistic.)
If you think it’s necessary, you can send it by overnight mail. There’s rarely an issue about receipt, and there’s a presumption (legal assumption) that a properly addressed and postpaid letter has been received. But if you want the shock value and a delivery signature, fine.
So the bottom line is: Stop negotiating this placement now, or you’ll be estopped!
Thanks again, Rick. May this help you get that well–earned fee NOW!