I am a freelance application developer. I currently have a client who I began working with in January. A contract was signed stating the project was to be completed in March and that mockups and full requirements would be coming. I did not complete the project in time, partly because I was still receiving requirements and mockups up through April.
Scope creep has gotten worse as the days go on, and yesterday the client informed me that they do not intend to pay my final payment due to the project being late (and they take no responsibility for it). At this point, I am no longer interested in finishing the project, and I want to fire the client.
Problem #1: There is no termination clause in the contract
Problem #2: The application is not complete. The client has threatened to sue for breach of contract if I do not finish what I signed off for originally.
So far the client has paid me 75% of the total payment; the remaining 25% is the final payment that I have not (and apparently will not) receive. It's my understanding that this isn't a Material Breach because the client will still be getting a fully functional application that is just missing a few of their requirements. I have every intention of giving them every line of code I have written.
FWIW, this is a small claims case. The total payment amount for the project is supposed to total only $4000. I have received $3000 so far. However I am worried that they will try to seek damages for lost revenue for the project being late.
All in all, how do I fire this client without a lengthy and potentially expensive lawsuit afterward?
P.S. I am not interested in finishing the project and fighting for the final payment when completed. Despite there only being a few original requirements left, the client will continue to add new requirements and blame me for it being late. This isn't worth $1000.