Advice

[FedUpAdvice]

Hello everyone.

Just have a quick question.

What does the law say about implementing penalties when it comes to software development for late delivery?

The scenario is this: Did some work (projects) for company X. Some were late due to a combination of factors from both their and my own side but mainly because of me delivering late (2-3 months late). I have a contract but it does not mention anything about late delivery as the original agreement was that payments will be made in milestones (which it has not). The company has gone and penalised me at their own discretion 33% of the total on some projects. Is this even allowed? Surely there is a defined maximum when left open for interpretation by law in regards to late delivery of any product not just software? To the people that are thinking I deserve that for being late also take into account that i have not received ANY payment for the past 3 months from a project which has been in live use for that time period (which if I did I would have just accepted their penalties) and hence why i am asking for advice as if this goes to court I will be claiming all full amounts.

So any advice (pre lawyer stage as I dont have much money to spend on lawyers if its a lost cause)?

 

[Eti1]

Does the contract say anything about penalties

 

[FedUpAdvice]

Does the contract say anything about penalties

Looking for the contract but as far as i am aware no as it was mainly meant for milestone based deliverly. Even if it does it would not state an amount so surely in that regard there is a prescribed maximum?

 

[Eti1]

Looking for the contract but as far as i am aware no as it was mainly meant for milestone based deliverly. Even if it does it would not state an amount so surely in that regard there is a prescribed maximum?

The Conventional Penalties Act doesn't prescribe a maximum, but a court may reduce it if it's excessive. Sorry, I don't know what is excessive in such a scenario. You may have to lawyer up.

If the contract contained no penalty clause, you also may have to lawyer up to dispute the penalty. Hopefully a letter will do, cos litigation is expensive.

The other option is to suck it up and move on.

 

[Cius]

The cost of litigation and the time and energy involved are not worth it in my opinion. In future make sure the contract is more specific about penalties and sign what you are happy with. Sounds like this scenario was not agreed up front so the company is doing what they feel is fair (or trying their luck). Either way I would first present evidence to them on why it was partially their fault too (requirements moved, feedback was slow, etc) and use that to request they lower the penalty rate. If they don't move on and write it off as university fees. If you are going to freelance like that you need to do some time and research on contact negotiation and clauses that are needed to protect both parties.

 

[Fro]

You can go to the small claims court if what you want is less than R12 000. No lawyers. Worst case scenario: you won't get much. Best case scenario: You get the 33%.

 

[desiganp]

In my view, if there is no clause in the contract which stipulates how delays, non-delivery or force majeure will be handled, and the company goes ahead with arbitary penalties not catered for, then the company is in breach of contract and acting unlawfully.

The value of the contract and assessment of the risk of losing future work from this company will guide you on whether to go the legal route to enforce the contract or not.