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  1. #1
    Join Date
    May 2011
    Posts
    4

    Default Independent Contractor Directly Billed Our Client

    My question involves business law in the state of: New York

    I own a small NY corporation, and I utilize other companies as independent contractors to help me with my business. My services to my clients include a money-back guarantee on some services. Recently, I client asked for their money back as per their contract with me.

    When I reviewed their account, I thought they had failed to pay me a portion of their fee under our contract. When I spoke to my clients, i discovered that my independent contractor had arrenged for the clients to pay them directly. They told my clients that the payment was going to me, when in fact, it went directly into their bank account (their account is under a completely different business name than my own, and the contract notes that all payments are to be made to me).

    I paid the clients back the money thay paid me, but now they want me to also pay them the money my IC took from them. Am I liable for this? My IC claimed the money was going to me, but the clients receipts show a different company name (my IC's company).

  2. #2
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Problems with Independent Contractor

    I paid the clients back the money thay paid me, but now they want me to also pay them the money my IC took from them. Am I liable for this?
    Do you have a written contract with your customers? Does it say who they are to pay?

  3. #3
    Join Date
    May 2011
    Posts
    4

    Default Re: Problems with Independent Contractor

    I do have a written contract with my clients. It specifically says all payments are to be made out to me.

  4. #4
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Problems with Independent Contractor

    then show that to your customer and tell them you are more than willing to refund all payments that were made to you in accordance with the contract.

    I suspect you might still get hassled and depending on all of the facts, you might still be held liable for the refund.

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