Client expanding the scope - now demands refund

Question

I agreed to work for a remote client (USA). He had almost no specs defined. Up to a point I kept asking questions to him to derive features but later he grew greedy and kept asking for more and more features.

We had set milestones during the project against which he paid me though. However his expectations grew too high for the amounts agreed later on, and that's the point the question of refunds emerged.

We exchanged very long emails wherein I tried to explain that I was already stretching myself to meet my ends, and I could only provide certain features - agreed before the costs were finalized. Unless he revises the cost, I would be unable to deliver more.

In this whole process I lost trust that whatever features I am doing work for, I will not get paid for as well. Before 100% payment goal, I have committed all code and shared with him a month before.

Yet he is not well with it - despite code he is trying to find faults with it. As for bugs, he holds final say because I don't own as many hardware as him, and even if I fix things, it's up to him to spell out success / failure. I do not always get his feedback also, yet he keep disapproving my fixes.

I provided him with testable builds but he says code pushed doesn't compile by someone whom he has hired locally!!! I built everything from scratch for him, yet I am supposed to provide support to his team.

He is citing one of my very earlier emails wherein I had promised to deliver features on earlier date (not bug free off course but fully integrated) - the timelines delayed due to his insisting of more and more. As of today, I am not denying any delivery to him but I am not sure I will get paid, and I have taken other clients' work due to him being greedy. So I have suggested him to deliver things later, to which he doesn't agree.

Despite my delivery of features he is citing bugs and threatening to sue me.

Is lawsuit possible & feasible given that:

• I and him being in different country?
• The total amount involved is $6K (total paid, hence max disputed)
• I do not operate as a company but he does. I am self employed freelancer.
• We do not have any written spec to start with except the wireframes were all provided by him. He didn't spell out the details. I asked as much as I could on skype chat but later on he became too much wanting, so I stopped. He kept thinking that it's my job to derive specs.
• We neither had any signed contract except for NDA and itemized list of features to deliver (not descriptive list). All other communication has happened through email only.

What are my options here?

Answer 1

Several BIG mistakes:

1. No written contract (biggest mistake)
2. No statement-of-work specifying deliverables (i.e. I don't think you probably agreed, before starting work, to be responsible for builds done by third parties on the customer's behalf, but somehow you are tangled up in try to explain why they're not working)
3. You put ALL the work in one big $6000 chunk, which means that the client remains in a position to not pay you EVEN for parts of the work that don't have any reported problems). You should have done 'milestones' and collected portions of your money along the way.
4. For a project of this amount of money, you really should have considered an escrow service. $6000 is a lot of hours.
5. You let the client bully you into telling you how to run your business. Ugh.

* --- I am not an attorney. --- *

Since you haven't been paid, then the client COULD sue for damages but the client would be hard-pressed to constitute damages since the client doesn't seem to have lost anything tangible as a direct result of your actions.

If there WAS any way of getting money out of you, the client would probably have to sue you in your country. That would mean the client would either

• (a) take it up in a small-claims venue, if there is one, by making a personal appearance -- $$$airfare and lodging$$$ are not free, and the client would have to eat the cost of those, or
• (b) hire an attorney in your country which means some money would have to change hands before there could even be a case against you.

I'd urge some payment from the client if I were you, but truly at this point your chances of getting paid are very small!!! The client is probably blowing a lot of harmless smoke your way but if you really want to gauge your position, contact a local attorney for a consultation.

Answer 2

I mostly agree with @codenoire. It is really the good answer.

However, there is one more thing I would do to extinguish this kind of fire. I would also meet few companies (or at least one) that does the same kind of job you did/do for the customer. I would ask companies to evaluate the process you were gone throw with the client. As the final result you will get the opinion-valuation from that company telling that "the job you did would be worth xxx human hours at our office". If xxx hours is more than hours of yours already spent then you have not so much to worry about. Talk with few companies and see what they say.

• Ask companies to sign the valuation.
• Contact few local and USA companies for valuation.
• Such contact with companies will be good for you anyway, because one of two may happen: 1) you will see that you need to struggle for more competence (and you will see where to) or 2) you will show your competence for the companies doing the same as you do (it means you could be considered as option for outsource at latter times).

I may be wrong, but the only thing the customer could be worry about is your competence. Prove the competence of yours, get those professionals whose trust on you.

Answer 3

First of all, you should contact a lawyer in your country who has experience dealing with US law. We are not lawyers and should not be depended on for legal advice.

As to your bullet points:

• law doesn't stop at country boundaries, you may have to meet the laws of the country your are doing business in and your country.
• The dollar amount may change where the suit is tried, but it doesn't block the possibility of a lawsuit
• In the US, you are still liable if you lose. In this case you may be more at risk because at least in the US your personal assets can now be brought into play.
• Lack of a spec makes the potential lawsuit more confusing and harder for you to defend.
• EMail records and the fact that the he has paid you money clearly establishes a business relationship, no contract just makes it more messy.

You need to work with a lawyer to get all of the specific details, but I don't see anything here that would block a lawsuit in the US. Whether or not it is worthwhile for either side is a totally different matter.

You may want to consider this a lesson learned and be better prepared with contracts and statements of work for your next client.