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overdue invoices

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1 overdue invoices on Wed Mar 19, 2014 1:52 pm


Arresto Menor
We are a company who only recently started provided accounting services to a company which includes disbursement and processing of checks for payment to their suppliers. Part of our agreement was that we can suspend services if the client does not pay their monthly service fees.

For a while, they were overdue for a few months but since they usually catch-up, we did not suspend services seeing that their suppliers would suspend delivery of goods to them and would affect their operations.

Recently they terminated our service and requested us to turn-over to the new provider with the promise of settling their balances. the reason for termination was due to some lapses made by the previous accounting manager that handled their accounts but was resolved with the new manager that we hired. They decided to terminate anyway to remove any doubt that their partners might have due to the lapses. (according to them)

Seeing that they have been acting in bad faith (i.e. promising to pay but did not, and terminating our contract without due notice - our agreement states 1 month notice )

We decided to withhold documents until settlement of the overdue balances. These documents are filings to BIR that they would need to continue renewal of their other transactions.

We are planning to send a demand letter ASAP and would like to know if we would be in any disadvantage if we would pursue this in court? since we are practically a start-up, we would like to avoid having a long court battle. But would want to pursue if needed for principle's sake.

The settlement amount is in the area of 400k and we would like to charge them interest (no interest charges are stated in the agreement for overdue invoices)

thanks to everyone in advance for their advice

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