Freelancing Stack Exchange is a question and answer site for self-employed and freelance workers. It only takes a minute to sign up.
Sign up to join this community
I delivered software which failed to meet the client's specifications. I followed 90% of the specs, but not 100%.
Client is asking for a partial refund, for the features which were not delivered. He cites our contract which says "the software must be delivered in accordance with the specifications."
Is the client entitled to a refund? How much of a refund?
What happens if I don't give him a refund? Our contract says disputes will be resolved through arbitration.
Obviously, the following is not legal advice, but just some general advice from a seasoned freelancer / consultant:
It looks like your client is right in demanding a partial refund, given that you promised to deliver in accordance with the specifications. If you don't give them a refund, they can send you an arbitration demand and they'll basically sue you, just not in court, but in private arbitration.
My recommendation in such cases is to talk to the client and try to be as accommodating as possible -- perhaps there is a way you can satisfy the remaining 10% or perhaps you can reach some other agreement with the client.
I'd highly recommend avoiding litigation. If you can't make it right for the client, then I'd suggest giving them a refund.
Is the client entitled to a refund?
Yes! This should not even be a question. As a professional it is your duty to deliver what you promise. It will look like fraud if you agreed to do something you knew you weren't capable of and refuse to give a refund.
How much of a refund?
Depends. If the client originally prioritized these as being more important than the other items then you would owe more than 10%. Otherwise at or less than 10%. In other words their perception of what they were paying for and why matters. I'd ask them what they think is fair (since you don't know) and go with that.
What happens if I don't give him a refund? Our contract says disputes will be resolved through arbitration.
Your reputation is worth far more than the money you're hoping to keep. It will cost you more in the long run, to railroad your customer cause they will spread negative reviews about you. You would either go through arbitration or if you can't afford to pay the fees, it might become a public court case which would just make you world famous for not honoring your agreements. https://www.arbitrationnation.com/is-refusal-to-pay-fees-a-way-out-of-arbitration/
You say you only followed 90% of the specifications. Therefore, you are in breach of contract.
Not only is the customer entitled to a refund, he is probably entitled to compensation.
Re-read your contract very carefully.
Your customer's completly right. And tell you that your reputation worths more than any money you may receive that agree.
I suggest you as soon as possible trying to negociate with him, try to offer reasonable off by the specs didn't provide in the finished software and some even much better like negociating a new agreed with new deadline for provinding to the customer the software with full specs, that way will be much better because it'll highly help you to avoid reputation lost with that customer in my opinion fulfing your customer because him will have a finished software as promissed in previous agreed in hand.
Regarding this question:
Is the client entitled to a refund? How much of a refund?
To try refunding only 10% or other value according to the contract specifying some fee in case of you didn't provide some software spec. The more important thing here is to let your customer totally happy with your service for avoinding some reputation lost as I mentioned earlier.
Regarding this question:
What happens if I don't give him a refund? Our contract says disputes will be resolved through arbitration.
How you mentioned in your post your customer's totally right. Avoid any litigation because you'll only manage to lost it.
