You're still entitled to call fees even if you neglect to collect

By Mark Pestronk
Mark PestronkQ:Our agency has a contract with a large corporate account that requires the account to pay our fee of $20 per call to the after-hours service. However, for the first six months of the contract, we neglected to charge this fee, and the volume of calls was quite high. When we asked the account's procurement director to pay us for the six months' worth of calls, he refused, stating that we had waived our right to collect the fee. Is he right, or can we still collect it? Does it help us that the contract contains a "no waiver" clause? Even if we are right, what, as a practical matter, can we do to collect the back fees without antagonizing the procurement director?

A:
You have identified a common issue in modern corporate travel management: the travel management company's neglect to charge all the different fees authorized by the travel management contract. As corporate travel services become more and more menu-priced, agencies may simply be forgetting to charge all the different kinds of fees to which they are entitled.

If you just forgot to charge the after-hours fees, then you did not waive your right to collect them by waiting six months. According to a Virginia court precedent, a waiver "is the voluntary, intentional abandonment of a known legal right. It has two essential elements: (1) knowledge of the facts basic to the exercise of the right, and (2) the intent to relinquish that right."

Although this area of judge-made law differs a bit by state, I am certain that the case quoted above is a good definition of what constitutes a waiver everywhere. So, a waiver must always be "voluntary" and "intentional," and you have to have "known" of your legal right.

In your case, we have the opposite: neglect, forgetfulness and failure to follow through between the negotiation of the contract and implementation of the account. Therefore, you have not waived your right to collect.

Contrast your case with the landlord who does not charge you any late fees authorized by your office lease. Since all landlords are probably fully aware of their rights to charge late fees, a tenant could much more easily argue that the landlord's failure was the result of a voluntary, intentional decision.

Many contracts have no-waiver clauses such as the following, which is in American Express' standard travel management agreement: "Any delay or omission of a party to exercise any of its rights hereunder shall not waive, affect or impair the rights of such party, and any waiver must be writing and signed by the parties."

If you have such a clause, it would certainly buttress your contention that you did not waive your rights. However, as another court precedent wryly notes, such a clause is not foolproof because "like all contractual rights, the rights under the 'no waiver' clause are themselves subject to waiver."

I realize that you would not want to antagonize the account by demanding payment in the face of the procurement director's unfounded insistence that you have waived your rights. Perhaps it would help to have your attorney give you a written opinion on the issue, which you could then forward to the account with a polite note stating that this is what your attorney thinks.

Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at mark@pestronk.com. 
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