Non-Paying Client. Right course of action?

[mariahlullaby]

I'm trying to decide what is the right course of action about a non-paying client while remaining tactful.

FYI, I am a 19 year old web designer (freelance, just recently became incorporated, etc.) I did a web site for free for some really good friends of mine. As a way to thank me, they have recommended me to a ton of people and brough in a lot of business for me. One of the sites I did was for one of their really good friends. I now ask my clients for deposits, but I didn't ask him for a deposit but did tell him payment was payment upon completion of the site.

The site took about a month to build and was fully launched in early July, and he was very happy. I billed him towards the end of July and the invoice said payment was due within 2 weeks. I hadn't gotten anything from him, so after about 4 weeks, I emailed him and said to mail the check to a different address, as I was going back to college. No response. Emailed him again about 10 days later, no response. Called him about a week later and he said was going to pay me, and that he had gotten my emails. Still no check.

He then had the audacity to email me and ask him to change something on his site for me. I emailed him and said I would happy to make the change, but that I could not move forward until I was paid for the site.

That was about 4 days ago, and I haven't heard from him, and I know he is getting my emails. I didn't want to "harrass" him since he is really good friends with my friends, but this is ridiculous.

Is it appropriate to take his web site offline at this point? It has been about 6 weeks since he was supposed to pay me.

 

[Veritas&Equitas]

Terrible. Lemme guess...the motivational speaker guy website?

P.S. Yes, it's been 6 weeks, I'd definitely take it down until you are paid. Period. It's not like you haven't been patient.

P.P.S. I think your design and websites are awesome. For only a 19 year old, you have talent.

 

[synth3tik]

If your contract did not say anything about what may happen if payment is not received you may get into legal trouble if you take his site offline. I would talk to your friend that is friends with him and see if they can help. Then in your next email just let him know that if payment is not received in 1 week his site will go offline.

 

[mariahlullaby]

Terrible. Lemme guess...the motivational speaker guy website?

P.S. Yes, it's been 6 weeks, I'd definitely take it down until you are paid. Period. It's not like you haven't been patient.

P.P.S. I think your design and websites are awesome. For only a 19 year old, you have talent.

Not to hijack my own thread, but a) thanks!!! I really appreciate it.... and yes, that's the site b) how's the comp working????

If your contract did not say anything about what may happen if payment is not received you may get into legal trouble if you take his site offline. I would talk to your friend that is friends with him and see if they can help. Then in your next email just let him know that if payment is not received in 1 week his site will go offline.

I am wondering though, does he truly own it if he never paid for it? I am hesitant to bring his friends into it though...I feel like this should be between us.

 

[mariahlullaby]

If your contract did not say anything about what may happen if payment is not received you may get into legal trouble if you take his site offline. I would talk to your friend that is friends with him and see if they can help. Then in your next email just let him know that if payment is not received in 1 week his site will go offline.

I am wondering though, does he truly own it if he never paid for it? I am hesitant to bring his friends into it though...I feel like this should be between us.

 

[Roric]

I am wondering though, does he truly own it if he never paid for it? I am hesitant to bring his friends into it though...I feel like this should be between us.

I would definately NOT bring the mutual friend into the picture here. Keep it professional and between you and the customer.

As for the taking his site down issue, are you hosting the site or is it on his server? If it is on his server, there could be issues with you logging in and disabling the site. If it is on your server, there are less issues, but it is still a sticky situation.

When I was in a similar situation, I wrote a polite, yet firm letter and sent it postal mail.

This is a reminder that your payment has not been received and your account is seriously past due in the amount of $XXXX.XX. Of this, $XXXX.XX is over 90 days past due.

Additionally, your domain name and web hosting are due to expire on December 31, 200X. You have been invoiced for the next year’s term (Jan1, 200X – Dec 31, 200X) in the amount of $XXX.XX. This brings the total amount due to $XXXX.XX.

Payment in full must be received by December 30, 200X. Failure to pay by this date could result in the loss of domain name and will result in extensive additional renewal fees if you choose to renew after this date.

Please disregard this if payment has already been sent. As always, your prompt payment is greatly appreciated.

I had the additional enjoyment of having done some network wiring and server maintenance work as well as the web hosting fees. I emailed and postal mailed this letter. The next day, I received a call from the customer saying he was sending payment that day. I did receive the check the following day.

Unfortunately, you may not have the additional carrot/stick of the domain name expiring to help spur the customer into action.

The question of if the customer actually owns the website if they haven't paid for it yet...common sense says No he does not, but when was the last time business contract law followed common sense? Your best bet is to send a written letter, not email and put in some polite, yet firm, wording that non-payment will force you to take legal actions to collect the debt.

This should go without saying, but do not make any updates to the site before you are paid.

One more quick question, did the customer ever sign off on acceptance of the site as originally designed? That may be another point of contention that will make things difficult.

 

[CanadaRAM]

I am wondering though, does he truly own it if he never paid for it? I am hesitant to bring his friends into it though...I feel like this should be between us.

Legally, he does own it unless you have a written contract that you own the site and the contents until it is paid in full.

Here's the deal - you agreed to extend him credit by saying "I build now, put it online, pay me when done". Once you have done that, you have agreed that he owns the product as soon as you deliver it, because your consideration is his promise to pay.

If it was a cash deal, the contract wouldn't be satisfied until the cash was paid, but since you agreed to extend credit, the contract is satisfied by your acceptance of his *promise* to pay. Do you see the difference?

So, if you took it down off his server, you would be in the wrong and he could sue for damages. Just like you may have to sue for payment of his promise. But you can't breach the contract itself.

Morals of the story:
- Always get a deposit
- Always have a written contract, including the clause that you own the work product until payment in full has been received.
- Always put the draft website on YOUR server, let them approve it there, and only transfer to a public server AFTER they pay. That way they can't get the benefit of the work until it is paid for.

 

[Benjamindaines]

Pull the site and send him an email, if he doesn't respond he doesn't care and you can forget about it. If he does respond it will be to pay you.

 

[Veritas&Equitas]

Just like you may have to sue for payment of his promise. But you can't breach the contract itself.

Eh, she can. For a number of reasons. She's already held up her end of the bargain, and him saying that the site is fine shows he assumes it was finished. Per their agreement, he said, in effect, "I will pay you when it's done." If you're hosting the site, it's on your dime, and you can pull it. If it's his, you are on shaky ground.

I think she could argue the Jacobs & Young v. Kent substantial performance doctrine, in that there was a material breach of the contract when he refused to pay after acknowledging the site was complete, in that, even if it wasn't ENTIRELY finished, her job was substantially performed; his payment was not.

Pull the site. Even if he does threaten legal action, I can think of a number of defenses that would stand for you. Don't listen to all of these threats from other members...pull it until he pays. Period.

 

[jelloshotsrule]

for legal reasons, i won't go into the details.

but

may i recommend using a little imagination with the following objects:

1 pickle
13 #2 pencils
1 half gallon of ice cream (NOT sherbet)
2 copies of meatloaf's greatest hits CD
and a porcupine


that oughta do it

 

[mariahlullaby]

Eh, she can. For a number of reasons. She's already held up her end of the bargain, and him saying that the site is fine shows he assumes it was finished. Per their agreement, he said, in effect, "I will pay you when it's done." If you're hosting the site, it's on your dime, and you can pull it. If it's his, you are on shaky ground.

I think she could argue the Jacobs & Young v. Kent substantial performance doctrine, in that there was a material breach of the contract when he refused to pay after acknowledging the site was complete, in that, even if it wasn't ENTIRELY finished, her job was substantially performed; his payment was not.

Pull the site. Even if he does threaten legal action, I can think of a number of defenses that would stand for you. Don't listen to all of these threats from other members...pull it until he pays. Period.

Thanks a lot for all that info. The site is currently down and I sent him an email that was firm but not harsh. I have taken a ton of advice from this thread, so thanks to everyone! I have a formal contract written up that includes my right to take the site down.

I will keep you posted on what happens....


Thanks to everyone!

 

[CanadaRAM]

Eh, she can. For a number of reasons. She's already held up her end of the bargain, and him saying that the site is fine shows he assumes it was finished. Per their agreement, he said, in effect, "I will pay you when it's done." If you're hosting the site, it's on your dime, and you can pull it. If it's his, you are on shaky ground.

I think she could argue the Jacobs & Young v. Kent substantial performance doctrine, in that there was a material breach of the contract when he refused to pay after acknowledging the site was complete, in that, even if it wasn't ENTIRELY finished, her job was substantially performed; his payment was not.

Pull the site. Even if he does threaten legal action, I can think of a number of defenses that would stand for you. Don't listen to all of these threats from other members...pull it until he pays. Period.

J&Y vs. K has problems of its own -- not the least of which is that at issue was completion of a job vs. balance of payment, and not the demolition of the entire house if payment wasn't received.

Laws may differ in different jurisdictions, but I had the same situation and had to eat $7,500. I am not offering legal advice, but I'm parroting what my lawyers told me.

I think it hinges on whether the client refuses to pay outright, or has promised to pay but is late -- once credit has been offered, late payment is not grounds for breach of contract, unless there are terms in the contract that provide for that. There are some cases in English law that pertain to this - but they too are talking about suspending performance on a building site - not 'reposessing' or destroying the end product if payment is not received. In some of these, late payment was not grounds to breach contract, however refusal to meet a final demand for payment was sufficient grounds.

In Canadian law at least, the 'Mechanic's Lien' (which for example gives a transmission shop the right to hold and sell your car for cost recovery if you don't pay for the transmission repair) does not apply to consulting work like websites.

There's another point -- if the client has any brains about them, they have already made a backup of the site. If she pulls the site, he simply restores it and changes the password. And any hope of getting payment after that is gone out the window.

 

[Abstract]

Legally, he does own it unless you have a written contract that you own the site and the contents until it is paid in full.

Here's the deal - you agreed to extend him credit by saying "I build now, put it online, pay me when done". Once you have done that, you have agreed that he owns the product as soon as you deliver it, because your consideration is his promise to pay.

If it was a cash deal, the contract wouldn't be satisfied until the cash was paid, but since you agreed to extend credit, the contract is satisfied by your acceptance of his *promise* to pay. Do you see the difference?

So, if you took it down off his server, you would be in the wrong and he could sue for damages. Just like you may have to sue for payment of his promise. But you can't breach the contract itself.

Morals of the story:
- Always get a deposit
- Always have a written contract, including the clause that you own the work product until payment in full has been received.
- Always put the draft website on YOUR server, let them approve it there, and only transfer to a public server AFTER they pay. That way they can't get the benefit of the work until it is paid for.

Holy ****......I hate business.


If you can't take his site down, change it to something he doesn't like. Make all the links dead, or make it look tacky. Like CanadaRAM explained, he may have legal ownership of the website after you handed it over to him, but you didn't promise any "Satisfaction Guaranteed" statements, did you? If you didn't get payment for your work, why should he get a good website? I'm only suggesting this if he truly will not pay.

Also, send him a proper letter, not email.

 

[John Jacob]

Brass knuckles and steel toed boots?

Oops, that won't do seeing as you did mention tactful. I'd go with the others and take the website down.

 

[GavinTing]

Brass knuckles and steel toed boots?

Oops, that won't do seeing as you did mention tactful. I'd go with the others and take the website down.

You need to read the entire thread first -.-


Anyway, If the website is not for a big company with big lawyers, you probably won't get sued. This the world of websites

 

[Veritas&Equitas]

Anyway, If the website is not for a big company with big lawyers, you probably won't get sued. This the world of websites

Exactly. We're not talking about a corporation here. We're talking about a guy that presumably can barely pay for a website, much less a lawyer. However, I will be selling my services within a year or so

P.S. CanadaRAM, regardless of what problems you feel J&Y v. K has, it's still recognized nationwide as one of the most important decisions in Contract Law.

 

[todd2000]

for legal reasons, i won't go into the details.

but

may i recommend using a little imagination with the following objects:

1 pickle
13 #2 pencils
1 half gallon of ice cream (NOT sherbet)
2 copies of meatloaf's greatest hits CD
and a porcupine


that oughta do it

ROTFLMAO!

Best post EVER!

 

[jelloshotsrule]

ROTFLMAO!

Best post EVER!

wow. thanks. glad to see i have a fan

 

[technicolor]

I saw a website once that the webmaster had placed a rather large note saying

THIS IS A NON PAYING CLIENT. THE SITE WILL BE REINSTALLED ONCE PAYMENT IS REMITTED.

 

[mariahlullaby]

Since the thread is back up, I will give you an update:

Finally got ahold of the client once the site was took down (no easy task, but through his MySpace account, oddly enough). He was really, really great about it and was really apologetic and said it was a money issue. We worked out a payment schedule, and everything's going great.

Thanks for all the help everyone!!