• Enquiry
• Quote
• Agree
• Work
• Invoice
• Paid

Business Against Consumer

This is not legal advice, and consumer protection law varies substantially by jurisdiction. What follows is the shape of the difference and the questions to ask locally.

For a software-side reference alongside this discussion of invoicing, records, and payment administration, Monitask has this resource.

The same work, invoiced to a company and to a householder, sits under different rules — and the differences run through the quote, the terms, the cancellation position and what happens if you are not paid.

Who counts as which

Not always obvious.

A landlord instructing work on a rental property may be acting in a business capacity or not, depending on jurisdiction and circumstances.

A sole trader having work done at home is a consumer for that work even though they are a business elsewhere.

A director paying personally for work on a company property, or the reverse, is the entity question again and it determines both who owes you and which rules apply.

Establish it at quoting stage. It is a question about the invoice address and it produces the answer without any awkwardness.

What changes: information you must give

Consumer work commonly carries requirements to provide specified information in writing before the contract is made — who you are, what the work is, the total price or how it will be calculated, and cancellation rights where they apply.

Failing to provide it can affect enforceability, and in some jurisdictions extends cancellation periods substantially.

For business customers these requirements generally do not apply, and the terms are whatever the parties agreed.

What changes: cancellation

Contracts concluded away from business premises — in somebody's home — commonly carry a cooling-off period for consumers.

Starting work during that period is possible in most systems and usually requires the customer's express request, in the prescribed form, or you may be unable to charge for what you did.

This is the specific rule most often broken by trades, because the natural sequence is to agree at the kitchen table and start on Monday.

Find out what applies where you work and build it into the paperwork once, rather than discovering it during a dispute.

What changes: terms and interest

Statutory late payment provisions for business-to-business transactions — such as the UK's Late Payment of Commercial Debts (Interest) Act 1998 — generally do not apply to consumers.

Contractual interest against consumers is more constrained, and unfair terms rules can strike down clauses that are one-sided.

Which means a term that is unremarkable in a business contract may be unenforceable in a consumer one, and copying one set of terms into both is a common and avoidable error.

What changes: the practical position

Consumers are frequently easier to collect from and harder to sue.

Easier because the sums are smaller, the customer is present, and payment on the day is available in a way it never is with a company.

Harder because the routes that exist for business debt do not apply, and because pursuing an individual over a modest sum rarely justifies itself.

Which pushes the emphasis further towards deposits and staged payments for consumer work, since the recovery options afterwards are thinner.

Two sets of paperwork

Keep them separate rather than trying to write one document that covers both.

A consumer quote with the required information and cancellation notice. A business quote with terms, interest and the assumption of commercial dealing.

Ten minutes to set up once, and it removes the class of problem where the right words were in the wrong document.

Where the customer is both

A householder who asks for the invoice to go to their company is making a request with consequences.

It may be entirely legitimate — a director whose company genuinely bears the cost of work at a property it owns.

It may be a tax arrangement that is not yours to police, and it is also not yours to facilitate blindly. The invoice should describe the work accurately and be addressed to whoever the contract was actually with.

Where the two differ, the question is who agreed the work, not who wants the paperwork. Changing the addressee changes who owes you, and a company that never agreed anything is a company with a good answer when you chase it.

Ask before invoicing, not after: "Is the contract with you personally or with the company? I'll need to know for the paperwork."

Deposits with consumers

Consumer protection rules commonly constrain what can be retained on cancellation, and a non-refundable deposit clause may not be enforceable as written.

A deposit reflecting actual costs incurred is a different proposition from one set at a round percentage regardless of what was spent.

Say in the quote what happens to it — what is retained and why — because a term that explains itself is far more likely to hold than one that simply asserts.

Records differ too

Consumer work generates paperwork you must be able to produce.

The written information, the cancellation notice, the acknowledgement that work was requested to start early. These belong in the job file with everything else, and their absence is what turns a straightforward claim into a difficult one.

For business work the file is about the commercial position — the quote, the variations, the correspondence — and the statutory paperwork does not arise.

Same folder, different contents, and knowing which set applies is decided at the moment you established who the customer was.

The short version

• Consumer protection law varies by jurisdiction and this is the shape of the difference rather than advice
• Who counts as a consumer is not always obvious — a landlord, a sole trader at home, a director paying personally
• Consumer work commonly requires specified information in writing before the contract, and failing to give it can affect enforceability
• Contracts agreed in somebody's home usually carry a cooling-off period, and starting during it requires an express request in the prescribed form
• Statutory business late-payment provisions generally do not apply to consumers, and one-sided terms can be struck down
• Consumers are easier to collect from and harder to sue, which pushes the emphasis onto deposits and staged payments

For broader background on invoicing, records, and payment administration, see Reuters.