Client refuses to pay, now threatening to sue me for breach of contract

Question

Okay, so, a couple months ago I started working with a man who needed help with his website. He had a very low budget, but seemed kind of desperate and was an older man who was basically banking on his business making it big and i sorta felt for him so I agreed to help him with some web tasks and marketing items for $100 a month. This is waaaay below anything I would normally charge, by the way. I am a young woman (23) and he specified he was looking for a student to do the work so I should have seen the red flags.

Two months later and only $100 payment received, this guy was texting me every day, trying to get me to go to these weekly meetings that were outside of our agreement, never giving me enough notice, started showing a bit of a short temper, and overall just making me uncomfortable and being way too demanding.

Now, it is February and I had not received February payment, it was a couple days late. I tried to speak to him about how the scope of the project had changed and that this was becoming too much for me. He kept badgering and twisting things around as he usually does and eventually I told him very politely that I could not continue working on the project, but would carry out the work in the next few weeks and help with his transition. He thanked me and said that was fine.

Next thing you know he tells me he will not be paying me for February since now he has to look for someone else. So I tell him that I will not work without payment. He tells me he will consider paying me when the work is done, and continues to send me messages and emails (one was an approx 4000 word email about how he was a visionary and I was not seeing the value in the work). I respond and tell him that I will not do unpaid work, and ask that he respect my decision not to continue and stop sending me long messages.

Now he's sending me legal threats. It started with him wanting me to continue the work with no confirmation of payment and now he's saying my only option is to financially compensate him and pay for someone to carry out his tasks at market rate. I know this is ridiculous and he is just trying to take advantage of me but it is stressful and kind of creepy. In one of his emails he says "this will be a very expensive lesson for you".

Should I do anything? I'm never doing discounted work again, especially for someone I barely know. This guy is totally erratic and bordering on harassment. Does he really have any legal standing? He's basically saying that because I quit before his site was completely finished he can sue me for damages.

Answer 1

Firstly, read the contract, there's no way we can assess the contract and understand whether you're in breach or not. Secondly, read up on contract law within your state / country, look into his options of obtaining the product.

Stop all work now, take down any files he may have access to over the internet, and refuse to provide any work. This should be done sooner rather than later to prevent him from paying someone to obtain as much as possible through scraping.

Copyright law within most jurisdictions handles the transfer of ownership upon payment. Check the specifics within your state / country as IANAL and can't provide 100% accurate legal advice. But with your case, and assuming we're following 'standard' copyright law, you legally must provide the work in which you've been paid $100 for, as he is the legal owner of this. However, all unpaid work belongs to yourself.

Looking at this case, I'd rule out small claims. The client may or may not have a leg to stand on with his claims (again, we don't have the contract so we don't know), and if he does, it could get messy and go either way. If you're confident you can win a case if it does go to small claims, by all means follow through, but that's something you need to decide.

Even if small claims isn't an option, using it as a means to obtain payment is an option. follow your jurisdiction's regular means of starting a small claims case with the client, as the process can be intimidating whilst remaining professional. From your descriptions of his legal threats, it seems quite unprofessional and childish if anything. This gives me a feeling that he's not too serious with it, and he would likely sh*t himself when something professional comes through with significance and pure, cold intentions.

Your jurisdiction would likely have you provide a letter of intent to the client, informing him of your intent to take him to small claims court, with an attached invoice. Again, no snide remarks, insults or point scoring, just pure intentions and facts. refer to any proof you may provide within court to win your case, including: the contract between yourself and the client; invoices sent in attempts to obtain payment; any current unpaid work for the client; any email strings that further establish a legally binding contract; etc.

As mentioned above, read through your contract and look for any clauses similar to a non-disclosure agreement or a non-compete clause (not sure how far these would stand in court but best to assume it's enough to prosecute, rather than take the risk, but definitely check with your local laws too). If there are no clauses regarding or related to the two topics mentioned, you're in the clear. I'd include a, possibly separate, letter to him that at current, you have also looked into alternative options of payment (I.E Selling unpaid work to competitors, Using the remaining parts of the unpaid product yourself).

But again, make sure this is as formal as possible. Don't fall into a trap of obviously trying to extort (legally of course) the money, as people easily identify this method and usually see it as a sign of desperation, that you've lost all hope of obtaining payment so are resorting to violent letters and threats of ruining his business. I'd definitely give this letter a good second read just to make sure there aren't any hints of obvious aggression (though with that said, you want it to be intimidating, just not aggressive as such)

To finalise the feel of professionalism, make sure these letters are sent physically rather than through email if possible. If you do intend to follow through with small claims, make sure you pay some extra to get proof of him successfully receiving the letter. This course of action is likely the most beneficial, even if you're not seeking to gain payment for your losses. The method reinforces your professional demeanour, and shows the client you're willing to escalate to legal action if need be. This, if anything, should at the very least get him off your back.

But most importantly, remember not to fall to his level of obvious on-the-spot threats and condescending assumptions of already winning. I repeat this, as it is a regular mistake of most in similar situations. It doesn't provide any gains, as it doesn't intimidate a client, it only tarnishes your own standards and reputation. Refuse to co-operate via his provoking emails and instead only communicate through formal means and 'legal speak' to keep this client at arms length, and ensure he understands the current relationship and situation is serious.

Answer 2

Sounds like the client from hell; low discounted rate, bad payment discipline, erratic and way too demanding. Sadly, I have never experienced this type of client relationship improve - so your best (and perhaps only) option is to cut your losses and get out.

You could inform him that you are withdrawing from the project and will no longer respond to any communication. This means you effectively give him work you have done for free and will probably make him eventually go away.

If you need or want payment, the situation is more tricky as you will have to confront him using all the leverage you have. Remove any existing unpaid work and perform no more work until all debts have been settled. Ideally, demand pre-payment for any additional work. The downside to this model is that you have to be prepared to continue working for the client.

Only you can evaluate whether the money is worth it. Ideally, you should renegotiate the contract, setting an hourly rate and not a low fixed price - but that is probably not feasible.

Answer 3

Mistake #1 was accepting a fixed price for a variable amount of work.

Mistake #2 is accepting any kind of business correspondence via text. And quite possibly, handing out your cell phone number to clients that you don't have any good "history" with. They'll wreck your privacy. The simplest response is, "I don't accept client communication by text. Please e-mail instead. I will review your requests at that time." AND it's really more challenging to establish a paper trail with text messages in the midst, to sort out messes like you're in now.

If all your work is post-paid, and you've only been paid a few hundred bucks so far, then this dude probably won't get far in court. He can sue - yes. But it's a small claim, and he can't hire an attorney for a small claim. The most he'll get back is whatever he spent, and even then, that's unlikely because the payment/work units are severable by each month. (I'm not an attorney!)

I'd just close up shop as far as dealing with this person is concerned. If you're paying for hosting, zip up all the files, store them just-in-case, and shut it down. If he decides to pay you afterward, send him his files BUT NOT BEFORE you receive payment (and if it's a check, when it clears), and be done with it. I'd ignore any kind of conversion other than "where do I send a certified check?"

Answer 4

He still wanted further work, regardless of his payment status. Therefore, he has no grounds to sue you.

I learned this when my client/employer did the exact same thing to me. Walker Petroff fit your description to a tee, and he said, "stop bugging us or get a lawyer!". I got a lawyer and then he counter-sued me for over a million dollars. It was a bluff, as he dropped it right after the deposition.

Your client is following this pattern, too, so be sure of your facts and don't back down.