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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.

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    How are you measuring 90% of 100%? Listed features? Weighted features? Bullet points on a spec sheet? Work time? Depending on how you measure that 10%, it can account for a lot more than just 10% of the purpose of the application. – Flater Jun 25 at 11:21
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    If you know you failed to meet all specifications, why argue with the client? Negotiate a refund you can both be happy about. – Scott Jun 25 at 17:50
  • Can you be more specific about why you couldn't do the other 10%? say for example you failed the milestone but you can complete the task in another month for a partial discount etc – user22215 Jul 1 at 18:56
  • If you fail to provide, don't be greedy. 10% refund is your best case. Usually a client would want more since the new person hired to do this small project will cost more than 10%. – VarunAgw Jul 15 at 22:23
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Obviously, the following is not legal advise, but just some general advise 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.

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    Agree - the client should not pay 100% of the price for 90% of the product. You owe the client either a lower price or a completed product. – Nuclear Wang Jun 24 at 20:57
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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/

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