Repayment of money for cancelled project?

[Paulcalif]

I have a friend who is a freelancer, who had a contract for a project which was cancelled. My friend was paid half up front, but only about a quarter of the work has been done at the time of cancellation.

 

Now, the employer is acting like they want half the money back for work which wasn't done yet.

 

This project has been delayed many times due to scheduling, etc, and my friend has put off other work, to be available when project got going.

 

The contract didn't really say anything about payment upon cancellation. It did say the contract could be cancelled for any reason after 90 days.

 

I know there are a lot of freelancers here that must have similar and worse experiences, so I thought I throw this out to you folks.

 

Thanks

[ktm07]

I suppose the answer to the question depends on your friends desire to work with that firm again! It sounds to me as though there is no contractual grounds for keeping money that was not earned.

[Fran]

I would personally refund any money I hadn't done work for yet.

[Paulcalif]

The plug was pulled by the employer. This job was delayed once, due to season and scheduling conflicts. The job was back on track, and has been cancelled now because they say they can't get the subjects for the job--it's a photo shoot. Everything else was and had been arranged and in place since the initial start of the project, photographers, prep, locations/studios etc.

 

Getting the subjects together should have been the most straightforward part of the project. Liken it to dell being able to get computers for a photoshoot, or a car manufacturer getting cars, etc.

 

I expect the employer, or thier employer simply changed their mind about the project, because it's been delayed so long that it now makes more sense to wait for the new model of subjects. No fault of my friends. It boils down to poor performance and indecisiveness of either or both employer parties.

 

Thing is, my friend has made themself available this whole time, because it could've started back up at any time and the employer said as much. There were stages to the project, and no more work could've been done until the employers were ready to move ahead.

 

As an analogy in arch CG: you agree to do a rendering and animation of house, which of course needs to be done asap. You get paid half up front, and recieve plans for the house, enough to get started and full model the project. Then, you hear from the client that they don't know what material or color, and landscaping will be, so you can't do any of the rendering or animation work. In addition, they say they could have this info any time, so you can't take any other work with a deadline, because they're counting on you to deliver if the project starts back up and you've already accepted monies for the work.

After waiting, the client finally tells you they can't decide on the color(a simple task in the scheme of the project) of the house, and they no longer want the rendering at this time.

 

I don't know how lawyers and retainers work, but I believe that lawyers collect retainers for a job, and they are required to hold onto the money, so that they're able to do the work at a later date, or pay someone else to if they're not able. However, I do not think that they're required to give the money back, if say, the client decides not to follow through with the work.

 

I know this is a different situation, but my friend is willing and able to hold up her end of the contract. The employers have changed their minds.

[Paul Griger]

My design contracts were written so that I would retain the "retainer" in the event of a project being cancelled by a client. The contract was also written so that if I had more hours into the project than what the retainer covered, the client was also responsible for that as well.

 

In your friend's case since they are sans contract I would think a reasonable compromise would be to have your friend provide his documented hours into the project and invoice out of the 1/2 down. If he wanted to leave on a really good note then maybe provide that same invoice to the client, but then have a line item at the end saying that he'll eat half of the hours as a gesture in kind.

 

Remember that he dedicated time to this project which could have been used to generate money on another project. He should be compensated for that.

 

My $.02

 

Paul

[rotten42]

My design contracts were written so that I would retain the "retainer" in the event of a project being cancelled by a client. The contract was also written so that if I had more hours into the project than what the retainer covered, the client was also responsible for that as well.

 

In your friend's case since they are sans contract I would think a reasonable compromise would be to have your friend provide his documented hours into the project and invoice out of the 1/2 down. If he wanted to leave on a really good note then maybe provide that same invoice to the client, but then have a line item at the end saying that he'll eat half of the hours as a gesture in kind.

 

Remember that he dedicated time to this project which could have been used to generate money on another project. He should be compensated for that.

 

My $.02

 

Paul

 

my thought exactly.

 

He should be compensated for the time he did spend on the project. AS for leaving an impression if he hopes to work with them again?...sounds like a company I wouldn't want to work for again.

[FlytE]

The phrase "Time is money" almost seems appropriate here... but not quite.

 

From an employers point of view, they might argue that

 

A) You werent ACTUALLY doing work for them, you were waiting for them to give you work to do.... so what are they paying for?

 

B) You could have taken those other jobs if you had wanted, by outsourcing or hiring other staff to help you - but you didn't. They may feel that the fact you turned them down was your business decision therefor nothing to do with them.

 

 

How you handle this would likely vary a great deal depending on the project, but for straightforward projects what you could do is state a fixed cost for the project based on a specific timeframe - that is your project fee. But make it clear at the beginning that the fee is based on this predetermined timeframe. Any additional time resulting in factors outwith your control could result in extra costs at the clients expense.

 

I would also advice getting a lawyer to write up and/or review your terms and conditions of service based on this incident to cover yourself next time. My advice is, in the meantime consider refunding some of the fee to the client - only as much as you feel is fair. The put the rest down to experience.

 

Good Luck!

[thinice]

For me,

 

1. easy solution. refund the money for work not yet done.

 

2. if you are unhappy with the way the project has been going, itemised all the items that you think you should have been compensated for, ie: blocking up time for jobs that does not happen, attending meetings that does not lead to anywhere etc-etc. then, refund the difference (if there is any).

 

3. As for the client, if they are willing to pay 50% upfront, they would be one of my better clients.

 

Just my $.02