A client recently cancelled a web development job I was completing for them. Upon beginning the work, I was paid a deposit of approximately 40% of the total cost.
My question is, am I now obliged to hand over the project in its current, incomplete state? (around 70% complete). My preference of course would be not to hand over any work as I have effectively wasted time on (around 30% of) this job for no pay, but would this leave me in the wrong?
I agree with @SOIA (conditions should be per contract, verbal agreements are difficult and expensive to enforce so they are not likely to chase).
I have been freelancing since 1994 and only once did I turn up on site without a contract. I got paid, but I learned an important lesson never to do something like that again.
Never start a contract without something in writing. It covers you, and them in terms of expectations and liability.
If the client has asked for a refund, talk with them - Why did the project get cancelled? Anything to do with you, or was it an issue internally to them. If you had no influence on the project cancellation, avoid rocking the boat and future relationship/work with them, explain to them that you have had costs that you cannot write off so easily. Find a middle ground.
Always in a contract draft a termination clause or cost due % of final cost if terminated after xx weeks , (it can be a table of xxs at weeks yy) as that at least gives you a base figure, and note that initial payment is non refundable if contract terminaned after zz weeks.
Assuming your goal is getting payed for the 30%, negotiation is your only option.
If the client has no intention of ever using your work, it seems there is very little you can do, unless you have some social bond to the client and are willing to use it.
If the client has merely cancelled further work on the project, you actually have some options - assuming you have not already delivered the 70%. If you have the code and only you can turn the unfinished work into an actual deliverable, discover what he client actually needs and negotiate a short term contract which might allow you to recoup some (or perhaps all) of the money.
And - in the future - always have a contract. I have never involved lawyers - as I have found that a simple one-page agreement actually works and signals to both parties that any changes need to be in writing.
Technically, if your fixed-price project isn't broken into DOCUMENTED milestones, then the client owes you the complete unpaid balance.
The client has had a case of "buyer's remorse", and just because the client is no longer interested in the work it doesn't remove the client's obligation to meet his/her side of the contract. A contract isn't dissolved just because one side doesn't like it anymore.
Hand over all the completed work, and send an invoice for the balance.
As you have no contract, this may not apply to this situation: But at least in the US most good contracts state that your work is a "Work made for hire". Again in the US, those are "magic words" that mean "you hired me to make it; you own it immediately I create it; and you are obligated to pay for it." If you withhold the work, you not only have no basis for demanding payment, but you are seizing property that doesn't belong to you. Work made for hire agreements exist for that reason.
