Full question:
I work as a subcontractor for a jewelry designer. My boss noticed some pricing errors I had made on production pieces listed on my most current invoice. She corrected them, which is fine as I had not yet been paid, then she went back into already paid invoices and listed the money that I now owe them for mistakes I listed in production prices. Some errors were caused by hard-to-interpret costing sheets, some by the costing sheets having no labor listed and the boss verbally informing me of what to input, and some from unknown labor that I transferred over from preexisting similar designs for which I did know the labor cost. Their lack of input, as they continually state they do not have the time, when I looked up those labor costs required me to continue billing in this manner on unknown or unclear labor on various jewelry pieces for nearly four years. I've been trying to go over my labor costing lists with them for years to no avail. I even printed off my spreadsheet that I had developed based on items I had looked up in their costing sheets and by the above manner, and gave it to them a year ago. Now they are trying to retroactively extract pay differences on those past paid invoices. I do not have a written contract with them. I told them yesterday that their having paid me on each invoice was their verification and acceptance of the terms, prices, and totals listed in each invoice. Any questions on prices listed in each invoice needed to be addressed before payment and thus acceptance of the invoice is given. I am unable to find any documentation supporting these questionable business ethics. I would appreciate any input you may have or any resources you can direct me to. Is it legal for them to charge me these questionable labor cost discrepancies on past paid invoices?
- Category: Contracts
- Subcategory: Mistake
- Date:
- State: Kansas
Answer:
Mistakes in pricing can be complex, and courts differentiate between unilateral and mutual mistakes. A unilateral mistake occurs when one party is mistaken without the other party's knowledge. A mutual mistake happens when both parties share an incorrect belief. Generally, mutual mistakes can make a contract voidable.
If only one party is mistaken, the mistake typically won't void a contract unless the other party knew or should have known about the mistake. If the mistake was purely mathematical and made without gross negligence, it may also be overlooked.
In your case, if your boss accepted your invoices without raising concerns before payment, it could be argued that they accepted the terms and prices listed. They may not have a strong legal basis to retroactively charge you for discrepancies on past paid invoices.
If you want to pursue this matter legally, you might want to understand breach of contract principles. A breach occurs when one party fails to meet their contractual obligations, causing harm to the other party. Remedies for breach include money damages, restitution, rescission, reformation, and specific performance.
Restitution aims to return the injured party to their position before the contract. Rescission cancels the contract, while reformation allows for changes to correct inequities. Specific performance compels a party to fulfill their contractual duties when monetary damages are insufficient.
Promissory estoppel may also apply if one party relied on the promise of the other, leading to unfairness if the promise is not enforced. This requires showing reasonable reliance and that injustice can only be avoided by enforcing the promise.
For further assistance, consider consulting a legal professional familiar with contract law in your state.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.