Legal ramifications of walking away

Question

I'm about at my wit's end with a particular client. The project I've been working on for them for almost the past year is in a constant state of flux. The first sticking point is totally on me and my naivete, I never got a concrete set of requirements from them before starting work. It's an upgrade job and their requirements were basically "like the old system, but better." Lesson learned there.

The bulk of my frustrations is a never ending cycle of lax QA testing, minimal feedback, and feature creep. I ask questions and responses take weeks, if they're addressed at all. I put new features or parts of the system in the testing environment, tell them to test it out, whole months will go by before I hear anything. When I do hear back, without fail, their testing reports contain a laundry list of new requirements, either things they forgot to tell me about initially or new features they insist are necessary to the system. Then they ask why it's taking so long...sigh.

I've been paid half the quoted amount already per the pricing schedule set up in the SOW and I'm seriously considering dropping them as a client and just taking the hit. I've already spent 3 times as long as I thought I would simply because I've had to gather the requirements as I went along. My only concern is what kind of legal issues I might be opening myself up to by doing this.

I think I'm in the clear since, aside from an initial statement of work, there was never anything approaching a contract involved. I certainly never signed anything. It was basically an email exchange along the lines of: Me: "Here's what's involved and what the payment structure will be. See attached SOW.docx" Them: "Sounds good. Go for it".

Am I worrying over nothing?

Answer 1

I'm going to speak just as a suggestion: if there is no clear scope within the first 2 meetings, walk away. You are supposed to be getting paid for your expertise, not your time. With your expertise, you should estimate the amount of time to accomplish X, Y and Z goals, within the scope.

Another issue is not having a contract. Always get a contract, especially with Scope of Works being drawn up. In your contract, you need to make sure you have an Exit Strategy, so that either one of your can exit the contract as needed. Usually, if I cancel the contract for whatever reason, I offer to give up to 2 weeks notice (large projects), or as little as a week. It's reasonable, and proves to the client I won't bugger off right away. They can also cancel the project, usually for a fee. This is because if I don't have other work lined up (i.e. They promised to use me for 6 months and cancel after 2), I need some cash to fall back on while I get the next job in motion.

The Scope Of Work may include the payment terms, but does it describe anything about you having to stay on until completion? If not, then I would not worry about the legal aspect (read: IANAL). As stated above as well, you should talk to your client, and express your concerns. You will need to be firm, otherwise you are setting yourself up for failure. If I hired someone to refloor my living room, but I left the furniture there, I'd feel bad since that's not his job. His job is to refloor the living room, and that's it.

When people hire freelancers, it's usually because they can't do it themselves, and it's likely the client does not understand the work. Write notes, bring printed emails, draw diagrams, and do your best to explain the issues in person. There is nothing like an email argument conversation between two people who don't understand each other. When you talk, make sure he's being respectful of your time talking (i.e. not answering phone calls, not interrupting, etc), and make sure you don't talk to him like he's a kid. When it's his turn to speak, follow the same rules. He can't help you fix a problem if he doesn't know what it is though.

If it's just a matter of scope creep, then I would just refer to the Scope of Work, and explain that's what he paid you to do, so that's all you're doing. If he wants more work done, explain I would love to do that work, let me draw up a secondary Scope of Work and contract. This shows you are willing to work with him, but that you need proper documentation of the project first.

Answer 2

The lack of a contract does not necessarily mean there is none. I can only speak for the countries I worked in (all EU) but all of them have law that says if services where delivered over a certain period of time and payment was received for these services during an ongoing project there is some sort of contract or engagement.

Depending how much trouble you walking away gives the client (i.e., revenue lost or expenses to replace you and possible know-how you acquired of the organization) and in what way you intend to do it (send an email saying "goodbye" and disappear or do a decent transfer of knowledge, code, etc.) I would not assume they will just accept it. They might, but they don't have to. And depending on local law they might have a case.

Answer 3

Friend, your effective "contract" would be your SOW plus any written communications. And then I see one of two things, either:

1. There are specific boundaries of time and resources in those writings (as well as oral agreements) to constrain the terms of the contract, AND you are not pushing back when the client crosses those boundaries; OR
2. You have no stated boundaries at all.

Either of these is problematic. Now, I found an interesting document:

http://home.uchicago.edu/omri/pdf/articles/Fixing_Unfair_Contracts.pdf

Within that document, I found a GREAT point:

"The standard criterion for filling gaps in contracts is to supply the most reasonable, majoritarian term. While this criterion is more often identified with gap filling in indefinite contracts or as a solution to the battle of the forms, it is also a sensible solution to filling the gap arising from the invalidated excessive term."

What does this mean?

You started out fixed-price and you allowed the client to expand the scope past your original understanding or agreement. I'm gonna put a LOT of focus on "you allowed" because the thing to do when you want to stay in business is to make the client responsible for changing his/her mind, and NOT to eat it. But that's water under the bridge now. As the situation is at current, if the client is going to control the scope of the work and continue to expand it, you have three reasonable choices:

• Demand a higher price because of the scope change. Note that scope change doesn't ONLY include the specific deliverable, but also WHEN the client has completed anything that might prevent you from finishing.
• Change the terms to time-and-materials. And !%#&^%@!^!, get a written contract this time.
• Stop working altogether.

It's going to be up to you to present these options to the client with a reasonable lead time and force the client to make a decision. You can consult an attorney (cause I'm not one), and I'm pretty sure you'd be okay. There's not a court in the land that will support a contract situation where you've basically sold yourself into slavery - that's known as an unconscionable agreement based on the fact that it gives one party the power to literally exploit the other.

Best of luck.