Contract Claim

Your contract can be an effective collection tool provided it contains key payment provisions, and excludes others. And provided, of course, you meet the deadlines to commence a breach of contract action.

Key contract provisions

  • Timing for payment
    • Your contract should specify when payment is due.
      • “Net 30” (payment within 30 days of ) is common.
    • Beware of contingent payment clauses.
      • If enforced, “pay-if-paid” and “pay-when-paid” clauses respectively forfeit and delay payment.
        • Where possible, strike contingent payment clauses from your contract. Where not possible, attempt to convert “pay-if-paid” to “pay-when-paid” clauses, and set a deadline for payment–90 days from billing is common.
  • Interest
    • You may specify any agreed upon rate of interest in your contract.
      • Materialmen commonly charge 18% and even 24% per annum.
        • (I have collected interest as high as 36% per annum.)
    • Absent agreement, interest accrues at Wyoming’s statutory rate of 7% per annum.
    • A provision in your invoice or billing statement specifying a rate of interest not agreed to in your contract is likely unenforceable.
  • Attorney Fees
    • To be awarded attorney fees on a breach of contract claim, your contract must include an attorney fees provision.

Would you like help with your contract’s payment provisions?

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Statutes of limitation (deadlines)

  • Unless your contract provides otherwise, the deadlines are as follows:
    • 10 years for breach of a written contract.
    • 8 years for breach of an oral contract.
    • 5 years after the debtor establishes residence in Wyoming for an action on a foreign claim, judgment or contract, contracted or incurred and accrued before the debtor became a resident of Wyoming.

My business is getting your paid. Let’s discuss your case.

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Other considerations and topics for discussion

  • Beware of “no lien” clauses that could preemptively waive your lien rights.
  • Beware of “no-damage-for-delay clauses” that could limit your claims.

Please let me know if you would like to discuss these or other contract clauses. (I draft, review, and negotiate contracts, too.)

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