Hi, there. It’s me again, Anthony from Contractors Debt Recovery. Deeds of Settlement. Now some of you may have got this. This is where half way through a job without any introduction or warning you get a document from your client saying sign this. I’ll pay you thirty grand out of the $450,000 I owe you and we all go our separate ways. Sign here, please. Okay. Despite the complete arrogance of such a move how do we handle something like this?

Okay. My default position is that you just reject it because you’re walking away from the value of your work. That deed basically say that you walk away from the $450,000 value of your work and you agree to accept the full and final settlement $30,000 for it, for example. Now you’re just walking away from $450,000. Why would you do that? So my default position in the absence of other advice or legal advice or your personal circumstances is to reject it.

A lot of the time it’s just a test, just to try you on to see if they can get away with it. It wouldn’t work the other way. You couldn’t say to your client, “Jeez, this is really inconvenient this project for me at the moment so sign this deed so I can just walk away and you get another contractor.” That would never happen so why should it happen, the reverse, why should it affect you. So in the absence of any other factors I would reject the deed of settlement and demand from your client to explain themselves.

Ask your client why you’re valuing my work at $30,000. Why was this not announced to me? On what basis are you valuing it for $30,000 and what has changed such that you want to walk away from the contract value that we’ve agreed in writing. So demand the client to be accountable for this pathetic deed that they’ve sent you. It will make them very uncomfortable and will certainly send the message that you’re not going to settle for it.

And the final point is at that point I would chase your money hard, chase all of it either through legal process or through adjudication under security payment or in some fashion. Because you know that now a fight is definitely going to be in the offing. So to summarize in the absence of anything else reject a very low a deed of settlement. Just reject them outright. They’re just a try on. Second, demand that your client explains himself to you, and finally chase your money at that point and chase all of it and chase it hard. Otherwise, you’ll be saying good to a lot of it. I’ll see you next time.