Keith is a business consultant with an established practice. He was having problems with a customer who habitually paid late, recently getting behind by over 60 days.
Unfortunately, the contract had a 3 year term and didn’t specify any remedies for non-payment. Keith could terminate for cause, but he didn’t want to lose an otherwise good, long-term customer.
I recommended a strategy where Keith would offer to not terminate the contract in exchange for an amendment with more precise payment provisions that included the right to suspend services and collect late payment interest.
Just like Keith, I’ve learned a lot from my mistakes and now I don’t write a single contract provision without thinking what might happen.
If you are a management consultant who is targeting corporate clients, but they want 90 days or more payment terms, ask yourself: do you want to be a bank or a consultant?