Client threatening legal action constantly

Question

I have a client who is constantly threatening legal action against me even though I don't think I have done much wrong. I have done EVERYTHING I possibly can to keep the client happy, but it is never enough. He blames me for late delivery even though the goal posts change all the time.

Basically, we started the project nearly 2 years ago and had a contract drew up which had a scope of work included. The key point here is that at this point the app was very simple. The contract stated that we ESTIMATED the project to take 6-8 months. It also stated that all time frames are estimates and timing is not of the essence.

Since then the scope has changed DRAMATICALLY. I mean it is pretty much a different animal now. For some parts I have charged for these changes, but I must have done 100+ hours in free work just changing things to avoid confrontation. I feel he is just taking advantage now and getting anything he can, and is using threats to do it.

The changes that have been made and because they were made half way through a project have meant the whole process is backwards. Its a complicated project now and without being able to properly plan it has caused logic issues that have appeared. There are things neither me nor the client had thought about that have come up, yet we fix anyways.

I have said a few times that we expect to have a deliverable on a certain date, and have missed this a few times by a few days or so. This has been because one of these unforeseen issues. I still persist and get it fixed.

There have been times when the client went completely missing. 1 was 2 months! Others have included 1 or 2 week blocks. During which times I have had no choice but to move on to other work as he is not there to answer important questions allowing me to continue development. I have to feed my family after all and can't do that waiting weeks for him to come back to me.

He constantly asks for changes on the application and when I say no he will argue and argue and argue until eventually I normally just give in and do it to keep things calm. Before so, he will constantly threaten legal action, saying if we are still in dispute he will get a solicitor and they will deal with it. I don't think he has any grounds but it is never nice to be in that conversation with a client. Sometimes tempers flare and I suggest he just go ahead and do it. He never does and just says he will do it at the end should we still be in dispute.

When I send builds of the application, he sends a feedbag document. When I finish fixing the items on the list he comes back with a completely new document with completely new items (a lot of the time further changes), and then later blames me for late delivery. Naturally I am stunned. I don't understand it. In my head I am thinking 'why don't you first check against the list I just said was fixed. If another bug has appeared I will then fix it.' It makes the whole process drag on and on. I do my own testing but I can't catch everything of course.

The threats are coming thick and fast, and almost every week. He is still to this day trying to get us to change things and sending items that we 'apparently' agreed months and months ago on the phone. I don't recall ever agreeing to these things and there is no written evidence. Everything I have ever charged for is all in writing and documented. Even items I have done for free are all written.

In recent months I have told him everything has to be in writing, as I was not being accused of lying after every phone call. It is the only way I can guarantee that can't happen. Simply don't talk to him on the phone.

What do people think I should do?

Answer 1

Life's too short..

You have 2 choices....

1. Invoice for the work you've completed. Wait until that invoice is paid. Then tell him you're done. You'll package everything and prepare to deliver things in their current state and he will be free to find another developer to finish the project.
2. Be quiet, sit back, and realize your only option is to deal with the client.

Barring these two choices, I don't know what else you can do. Certainly trying to "change" the client or alter his work habits or how he interacts with you will never be fruitful. Getting everything in writing is a good idea, but that should have been done from day 1.

(Hopefully your files are not a nightmare for another developer. But even if they are... well, if it's not part of your contract to deliver complete documentation, then... well...)

Answer 2

It is good the customer has paid you. Unless contracted to provide services to them for the rest of your life, consider it ample opportunity to reconsider your relationship. I would avoid a customer who is a little quick to threaten the law. Customer/Supplier relationships are unlikely ever to improve.

If they are serious in legal action against you, then ask yourself 1) if their arguements are valid and 2) will they really pay a lawyer money to sue you? Are they that sure of winning? I suspect its hot air.

Scope change to any project should be charged.

You need have a UAT (User Acceptance Test) for future projects. Basically, within five days of you handing the project over, they must test. If no faults are raised within those five days, then project is deemed a success. If any faults are discovered, those faults, and only those faults are corrected. Any faults that were not included in the original project specification are in effect, new projects and should be priced accordingly.

Lastly, since you fear being sued I am guessing you do not have liability insurance - It's not expensive - for me it cost less than $500 and it covers me worldwide for up to $5million per incident on any job that does not involve physical labour (thus I cannot lift a computer, but I can program it). In addition, work under an LLC so if there is a customer who sue's, the credit of the LLC is tarnished, not you, your home/mortgage/family/etc

Best of luck!

Answer 3

If you already have a contract, he can threatened to sue you all he wants, there's still an agreement that was made between you and the client initially. Keep track of all the communication (you do now) and also when he calls you a liar. You shouldn't be too worry about the legal actions as this can also become an expensive process for your client and it's not always advantageous. Since it seems to work on you, it's possible the client noticed he can simply use these threats to coerce you.

If this was my client, I would request a new update to the contract in order to continue the project. In that new contract, you should add new terms/conditions (that he's unlikely to accept) and also charge a very high prepaid hourly rate and base price since he doesn't seem to respect the scope. Add a lot of details about the communication, the delay caused by you having to wait for feedback, revisions cost, etc. Give yourself some room for all the issues you now know might happen again.

If the client refuses to sign that new contract, simply give him his files and move on even if you suffer of some losses. For one terrible client, you'll get 10 new ones who will be worth your time.

It's also possible to simply cancel the contract but expect some resistance and more threats as this can be even more frustrating for the client than being given a "non option"!

The reason why you might want to give your client the option to update the contract rather than simply saying "I'm done" is that you let him the choice to continue to work with you with precise conditions or to stop working with you. You also take back some control on the whole situation and put your client back on the track. If he ever accept to sign it, you'll still deal with the bad attitude of your client but at least you'll get paid very well for the headaches and stress. It's normal to update a contract when the scope of a project changes a lot since the timeframe changes as well and the estimate for the cost of the project has to be updated too. You'll be able to start over with a plan to follow and can even suggest to your client to take a few weeks to think about all this and come back to you when he has a clear idea about what he wants. It's also a good way to get back some respect from the client and show you will not get coerced anymore. That's what any respectable business would do.

At this point, if the project gets cancelled, refer to your cancellation agreement in your contract. If you provided already everything you agreed to, then you do NOT refund anything and you simply give the files to the client. The only thing you should refund (and only partially usually) is what was prepaid or any down payment on the work that hasn't been done already. You could "freeze" the amount he gave you last month and make him agree to your new contract first. Then do the revisions based on your new fees. That money will be used for the new hourly rate you'll charge for the next revisions. This might actually help you accelerate the process; he'll probably try to limit the revisions to fit that budget and be done with the project.

If the client is starting to call you a liar, make him understand this is a serious allegation that makes you feel terribly uncomfortable and that you might need to discuss with your own lawyer (It doesn't matter if you don't have a lawyer.)

One last comment that might help you: Don't think of yourself as a freelancer. Start calling your services a business. That should help you get the mindset you should have when dealing with clients and know what is acceptable or not from them. Right now you seem to have the mindset of the "small freelancer" vs the "Goliath business" but in reality, you should expect a business to business relationship (and the level of respect that goes with this).

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Related:

Project based freelance project requiring multiple unexpected "redos" from client

Answer 4

It seems you have tolerated massive scope creep for a long time - and your psychopath client has picked up on that and is basically extorting you for free work.

Since the client has payed up, he really has no other weapon than 'social pressure' - which it seems he is using with considerable success.

It seems you have done everything right - having a contract, documenting requests and progress - so you need to call his solicitor-bluff and terminate your involvement in an objectively reasonable way.

Personally, I would fix any current bug or request you deem reasonable - and then turn in the source code, stating that your involvement is now over.

Any further work (if unavoidable) - documentation, knowledge transfer - I would put under a new contract.

Answer 5

First, I would let him vent, and encourage him to continue to vent. Keep him talking. Listen for what is frustrating him, not what is wrong with the project. Agree with him wherever possible! This is vital. Eat your pride. Don't commit to things, but agree with how he feels whenever you can. "Wow! I certainly hear your frustration. If I were in your shoes, I'd be upset too. I want to fix this. What is it that you need this to do? Not the software, what part of your job is this supposed to help you with, and how?" What this will do for you is give you insights that will allow you to spot potential issues during design/requirements discussions. It might also get him to "like" you, which will help a lot.

Second, I would look for commonalities in what he is asking you to do. Is he asking for changes in reporting? Does he keep asking for changes in the UI and he's focused on the look and feel? Does he want to change how his employees are managed? What about his work in progress? Try to discern what he is wanting to accomplish, not just what he wants the software to do. What are his problems? Gain insight into that, and you'll figure out why he's asking for changes. Then, focus on what would give him the most value first. He'll always tell you "it's all important and urgent." However, if you understand what he's trying to accomplish, you'll know what to focus on.

Third, is he the one using the code, or is it for his staff? He may not truly understand what they want, and when they tell him it doesn't work, all he knows is that his staff doesn't like it, and he's spent $X getting a software package that isn't doing what they need it to do.

Fourth, prepare for your legal case. Sometimes, things don't go right. Document EVERYTHING! Your phone calls, start times, end times, content. Write summaries of your understanding of all communications with him, and provide him copies of this understanding. If you email it, set it up to receive a notice when he opens it. Then you've documented that he's received it and you have a nice paper trail. He'll also know that you're documenting things, and I'm sure he realizes that in a legal case, whoever has the best documentation usually wins.

With these points, I bet he either starts behaving himself, or at least will be willing to consider a strategy for parting ways without leaving him with an unusable product.

Answer 6

Sounds like you have a client on a power trip.

I know this is a short answer, and one that has been repeated over and over on this question, but here it is: End the relationship, and go find a better client.

Clients are a lot like personal relationships: If you're in an abusive one, GET OUT. It's that simple. Do the work required, find another client, and politely end the contract. If you're smart, your contract already contains a clause that states that the client releases you from ALL liability to the maximum legally applicable extent.

To avoid this in the future - in every contract, you should make it clear that:

(a.) The client is not to pay until the current milestone / project is complete to his satisfaction.

(b.) Once the payment is made, that's it. No threats of legal action, no lawyers, no third parties may become involved.

(c.) Lack of communication is not acceptable (i.e. the contract becomes null and void or is put on hold after a certain period of attempted communication without any response, except for any outstanding balance)

(d.) Either party can end the contract at ANY time without penalty or liability.

Note that the above is not legal advice - it's common sense. Ask an attorney for additional advice and assistance in wording your contract terms properly. - I am not qualified to write legal documents, but this is definitely the idea you're going for.

In addition to this, ideally, you should not accept any payment until the work is complete, and you should be reasonable about making revisions / editions to your work.

Alternatively, you can take every contract to a third-party site like UpWork, which will take a certain percentage of your income to act as an escrow service for you. You create a profile, they create a profile, verify, enter payment info, etc - then just do all the work through their platform. This is probably the easiest way. It is often against the terms and conditions to take work found on a freelance site outside of their platform, BUT it is not against the rules to search for clients on the outside and guide them to create a profile and use the platform. These sites protect both you and the client, and they eliminate a great deal of anxiety surrounding contracts, fraud, and legal issues.

It is disheartening to hear that another freelancer is going through this. I hope you can find a reasonable solution to the situation.

Answer 7

You may not have a contract at all, as the one you have seems from your description of events to be illusory. You have received some good advice here, and you should incorporate as much as possible into your work.

A. You don't have a one big contract. At best it appears you have several smaller contracts. Check the terms, of the contract, and figure out what exactly you agreed to. He can't make drastic changes beyond the scope of the work he contracted you for. New revisions are new work, new jobs, new contracts, which you should be paid for in full. He can't sue you for contracts you don't have, preformed in good faith, and completed. The bugs are all you are legally required to fix. A contract requires offer of consideration, acceptance of that offer, and performance, and it doesn't matter if its software or a car. Think of it like a contract for a car. You sell the car, and the radiator is blown out, you're probable on the hook. However, the customer comes back and tells you, I wanted it in blue, even though he bought the red one. He must pay you to repaint it. He bought a car, and comes back claiming to want a truck. Guess what, he must pay you for both.

Courts won't recognize contracts that try to incorporate satisfaction clauses, as they are illusory. Therefore, if he paid you to build software that does x, y, and z, if it does x.y.and z then you have delivered the product and fulfilled your contract. He can't sue you, because a lawyer won't take the case, because it must have merit. Lawyers get in trouble and can lose their license if they try to file a frivolous lawsuit. What I'm telling you, is let the guy talk his s**t, because he can't actually sue without cause. So stop letting he get you for free work.

If you want to keep him as a client, do as Jay C suggests. Excellent customer service and client retention advice. Go-junta is correct on the in the future get incorporated as LLC tip, and some one some where said get liability insurance. All of which are awesome ideas. It is unlawful to threaten legal action, when you don't have a meretricious reason, a misdemeanor in fact. You may wish to inform your client of that fact. I don't know how bad you need this guys business, but quit him. You most likely do not have a contract or have already fulfilled your end. This is not legal advice, nor should it be substituted for legal advice from a license attorney.