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I am from India. I have worked on a project from a software consultancy company here in Mumbai, India. I started the work after receiving an advance payment, but soon the client started to change his requirements and he is continuing the same thing again and again.

When I said I don't want to continue and want to quit the project after it has been almost 70% completed, the client said he doesn't want the project or source code and is asking for a refund. If I don't do it, he is threatening me with legal action. We don't have any legal agreement between us for the project.

I don't want to refund any money to him as I have worked really hard to complete the project to almost 70% completion. What should I do in these circumstances?

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  • Where is the client?
    – Xavier J
    Aug 15, 2016 at 19:54
  • what do you mean where is the Client?
    – AndroidHacker
    Aug 15, 2016 at 20:35
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    Here's the thing.. I can ask for a refund and threaten legal action against anyone I purchase anything from. Threatening means nothing really other than they are trying to scare you into submission. As @codenoir points out, a verbal agreement is an agreement, although hard to prove. But emails can also be an agreement and much easier to prove. I don't know how anyone could answer this really. It's not so much a question asking for an answer... it's just asking for opinions, which isn't really great for the StackExchange format.
    – Scott
    Aug 15, 2016 at 22:28
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    @Scott: I disagree with you. Services are products as well. Situations where the customer has no obligation to purchase are too imbalanced and are unacceptable. Proceed in charged milestones so that the customer assumes his share of the risk.
    – user4521
    Aug 16, 2016 at 9:05
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    @HarryCover Uhm.. services are not products. By definition they are completely different. You're free to disagree but the English language is the English language. You can return a product, you can not return a service. Quantum Meruit is a valid legal argument. But I do agree. milestones are important and payment structures make a difference. I don't have enough information about this particular situation, hence the comment.. not an answer.
    – Scott
    Aug 16, 2016 at 9:25

3 Answers 3

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It's really up to you to decide what the work you have already done is worth. If the advance payment was in the full amount then maybe meet the client in the 30%-50% refund range, supply him/her the code and be done with it. If you received less than that in advance payment then don't offer a refund, cut your losses and be done with them. Whatever the case you have done work and should receive some compensation. You have the advantage if there were to be legal action, you have actual code (proof of work) and the client just has their word about a deal that may or maynot have been agreed upon.

A lot of times clients do not understand the difficulty in adding features, to them it just another button or form. One way to hinder a client from making constant changes is to charge for changes after the requirements document has been signed.

In the future it might be of interest to have a contract that is either signed in person or through a service like DocuSign to avoid situations like this. In the document spell out what the terms of your service are including changes to software requirements.

But with all of that being said, you should speak with an attorney as laws are probably different in your area compared to mine. They will be able to tell you if verbal contracts are binding or if you could potentially break any other laws by not offering a refund.

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You have just learned the importance of having a written schedule of deliverables. After which, anytime the client says 'can this do that', you say 'yes of course, that will be an additional $xx.xx, shall I add it to the requirements list?

As you asked for an opinion - my answer would be NO REFUND.

But, you should offer to help with the transition to another developer. If he does not want anything from you but the money back, draw up a list of the hours and what you coded and did. File them with copies of all the emails concerning the work. Zip them all up in an archive for your records only, in case of court action, and move on. Send him all the files anyway, a closing document explaining details of the code for a new developer (don't spend too long on it, just make it long winded and complex looking). Then you are done.

IF he takes you to court, go to court, explain it all, and tell them he has been unreasonable in his demands. You are never going to make this relationship back, so move on. Courts understand that services are not products, and you worked a long time with his consent all the way.

Next time, make sure your terms and conditions are written that say advance payments are non-refundable. This happens in business but a single page of an agreement (non=legalise is fine, just plain language) combined with the plan of what you are going to code is going to protect you in the future.

Good luck with it,

Paul.

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No refund, except maybe if the advance payment covers more than what has been performed.

A much better solution would be to find an agreement so that you deliver something of use to the customer (otherwise you can understand his anger). Ask for a written specification which will be formal, and negotiate the pricing.

Tell him your intent and stay firm. He will not sue you: you did some work on his request, which you can easily prove, there is nothing he can claim.

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