Client shafted me? How can I legally get even?

September 27, 2007 12:08 PM

A client asked a bunch of extra work of me, which I did on good faith, and is now shafting me on extra payment. What are my options?

So I did some work for an internet startup (they have money but are cheap). The original project was discussed and a price was agreed upon. Close to the time to shoot the project the scripts turned out to be 2-3 times as long as originally planned with no budget for a teleprompter. The location was not what it should have been, either. So shoot occurs and post shoot they begin to make extra demands...we want to put a background behind the talent (we shot against a white background so after a lot of filtering and work I was able to make this work). Then they wanted graphics, then x change and y change. It ended up taking FAR longer than originally planned. At one point there was an email exchange about "yes we should pay you some more money" but it was not defined. So project ends and I am told "we weren't happy with this part so some of us want money back but we have agreed to at least pay you the original amount just not any extra". It is clear to me that they had no idea what was actually involved in this process and did not listen to any of my concerns as I expressed them. They took advantage of my trusting nature and my desire to create the best product possible for them at a reasonable cost.

So anyways wondering what my options are and what I can legally do. A few things:

1) I registered their domain name @ .net and .org. I also registered a few typos of their domain name.

2) They have not trademarked their name so I am considering trademarking it.

If I set up a little website about the same business with some free forums or something am I safe? I don't want to get nailed for squatting or anything.

FYI there was no written contract at any point..it was all oral (my mistake I know).
I am not as concerned with going after them for a contract issue but rather if I get creative with the domain thing and/or the trademark is their anything they can do?

posted by anonymous to computers & internet (17 comments total)

Nothing you can really do, in my experience - sorry.

This is something called scope creep, and chalk this up to a lesson as to why you need to define and agree upon a projects scope in advance, in writing. Then, when the client asks more, point to the original scope document, explain that the request is out of scope, and will be billed at N rate.

Documentation is your friend.
posted by kaseijin at 12:18 PM on September 27, 2007

Further:

The "we're not happy with this, so we want money back, but we'll agree to pay you N, just not any more" bit is a total douchebag move on their part - usually invoked when the client feels like they can muscle you into doing work for free by threatening to withhold pay.

Again - documentation is your friend. Before a job starts with a new client, you need a signed statement of work that outlines the scope of the project, the rough timeline, and an agreed-upon cost estimate based on your stated hourly rate. Some folks request half of the estimate upfront.

They're pulling this crap because they know that they can, and you don't have reasonable recourse.
posted by kaseijin at 12:23 PM on September 27, 2007

It's a mistake you only need to make once. I know, because I made it. Once.
posted by letahl at 12:25 PM on September 27, 2007

Sorry to keep going...

Regarding tampering with their trademark and/or domain name. IANAL, but I believe this is pretty verboten and - if they choose to press it - can come back to bite you in court.

Chalk it up to a lesson and let it go.
posted by kaseijin at 12:25 PM on September 27, 2007

Why have you registered their domain? Why are you thinking of trademarking it? What could you possibly hope to accomplish except pissing them off, starting a messy legal battle, and dragging both your names through the mud? Unless I'm misunderstanding here. If you start getting nasty and combative, there's no way it will end well.

I agree with kaseijin. The only way you can hope to squeeze out the money you're owed is with a detailed, itemized invoice that would clearly hold up in court (so they will feel like they have to pay it). The fact that they said 'some of us want our money back' is unbelievalbe - you can't just decide not to pay for work - so you need to get serious with paperwork to show them that you mean business.
posted by PercussivePaul at 12:25 PM on September 27, 2007

I would strongly suggest not trying anything with their website and name trademark. Even if they screwed you over, you don't want that story to be running around your industry: "Well, after he demanded more money for the job, he stole our website and our business name."

Don't be so trusting in business deals, chalk it up to a lesson learned. Have a lawyer draft some basic contracts for future agreements.
posted by shinynewnick at 12:30 PM on September 27, 2007

IANAL blah....

I like your style. I'd call the company and speak to your contact there. I'd explain to them that you plan on advertising to people "exactly what happened". Explain how it would be cheaper for them to be fair with you then it would be for them to deal with the negative publicity that the facts would generate. Don't make idle threats or threaten/imply you'll make things up. Just stick to the facts, and threaten to share the FACTS. I've had problems with some business in the past (as a consumer) and this has frequently (although not always) worked.
posted by TheDukeofLancaster at 12:48 PM on September 27, 2007

Send a demand letter that outlines the situation. Note that you will take further action if not paid by . You may want to specify interest terms, although they may be hard to enforce.

If the date passes, immediately file in small claims court. Create a timeline of everything that transpired. Print any emails. Note any phone calls. If it is legal to do so where you reside, tape any follow up calls.

I've sued two clients for not paying. I won both times, even though, in one case, the scope change approval was oral. Suing the clients did not damage my reputation. Instead, it emphasized that I run a true business and that I expect it to be treated as such.

In the future, only work on written contract. Specify that any changes be made by written change order. Take a deposit before work commences. Collect payments at key milestones. Note an interest rate for unpaid accounts. For web projects, my contract specifies that 90% or 95% of the project must be paid before anything will be moved to their server -- that isn't necessary for your contracts, but it's helpful.
posted by acoutu at 12:54 PM on September 27, 2007

Revenge is a dish best served cold. Now that you have their domain, just wait until they want to set up a Web site and discover that you have it. Then charge them just enough to make you happy, but not enough for them to bother to sue you over it.

Oh, and you did learn your lesson about documenting project scopes, didn't you?
posted by Gungho at 12:54 PM on September 27, 2007

I've had problems with some business in the past (as a consumer)

...as a consumer, but not as a business partner. Shinynewnick hit the proverbial nail right on the head. You don't want them to spread bad word about you - whether it's true or not, it'll still stick.
posted by kaseijin at 12:57 PM on September 27, 2007

Personally, I would suck it up.

They're probably going to go tits-up.com soon anyway. That's why they stiffed you. Really, they don't have lots of money. All startups pretend they do, so that trusting suppliers will do business with them, but really they don't.

If you try and get revenge the negative fall-out will hurt you more.

In future, protect yourself in writing where you can. And qualify your customer. Try to be too busy for douchebags.
posted by i_am_joe's_spleen at 12:58 PM on September 27, 2007

First off, are you able to deliver to them only what they originally asked for? (Without adding in the new background, etc?) Then, you'd still be shafted, but at least they wouldn't have gotten more than they paid for. Basically, is there anything you can simply not deliver until paid for? Without a contract you can get shafted, but they also have little/no rights to your work, I'd think. (Yes, you'd still be out the $ for the time/materials/etc, but at least you'd both be out of luck instead of just you.)
posted by iguanapolitico at 1:22 PM on September 27, 2007

you could always resell the domain(s)... try to recoup some of the money they shorted you.

even fib a little, tell them that someone has offered you X amount of money for the block of domains you purchased (X being a value close to the amount of money they owe you) and say you wanted to give them the opportunity to purchase the domains first before selling them to this fictitious third party.
posted by hummercash at 1:51 PM on September 27, 2007

Absolutely do not do stuff with their domain or trademarks. I suspect that anyone here who's egging you on has not been business for themselves.

Your opening post makes it clear to me that a young inexperienced company hired a naive contractor, and things got out of control. You haven't described the contract, or how you invoiced and tried to collect. Also, maybe they do have a legit grievance with part of the work.

Acting on those vengeance fantasies with the domain and trademarks will only tarnish your reputation, and could put you in a world of hassle. Really.

Also, maybe they're not the shits you think they are. Maybe their startup will take off, and they'll remember that you gave 110% when they needed it.

Take reasonable steps to collect, don't get emotional, and if you don't have the documents to back you up, you gotta eat it and move on.
posted by Artful Codger at 2:39 PM on September 27, 2007

Also, maybe they're not the shits you think they are. Maybe their startup will take off, and they'll remember that you gave 110% when they needed it.

Unlikely. Pretty much every startup I ever dealt with as an outside contractor went one of three ways.

1. Died. No more contracting.
2. Stayed the same or grew incrementally. Led to getting more jobs of the same caliber.
3. Grew into a success. Now that they were a success, all the outside stuff should be internalized, so who needs contractors.

As a contractor, you're a hired gun. They have no loyalty to you, and a lot of places in fact see you as a necessary evil that they wish they could do without by having staff on board instead. Once they get to the point they have the resources, they will get rid of the contractor if it's feasible. Particularily if it's something that is a continuing need, such as the what the OP references in the way of content for a site/broadcast.

If it's something like dealing with a commodity piece of hardware that needs to be done once every 6-12 months for an hour or two, that's probably the only kind of thing that will stay contracted out once they get big. And only if there's nobody on staff they can shoehorn into dealing with it under the guise of "Well, you do X, it's kinda like Y, go figure it out!"
posted by barc0001 at 6:59 PM on September 27, 2007

Call up and speak to the person responsible for the account. This is a recon mission, not threat time (yet). Find out what basis they believe exists to withhold payment for completed work. If they're claiming this is "extra" payment for something outside the scope of the agreement, then you have the option of agreeing that as work that falls outside the agreement it is still your property to do with as you like.

Or maybe the real problem is that they don't have the cash flow, so figure if they can't get paychecks you shouldn't either. Whatever it is, just try to find out what's at the root of it. Only then will you have the information to act. If it looks like they're having $ problems, cut your losses, file in small claims ASAP (it takes a couple hours, tops, to do the paperwork) stake out a place high on the list of creditors to be paid when the bankruptcy happens, and move on quickly to better prospects and written contracts. Also, stop doing work outside of scope without a written change request. That always comes back to bite you on the ass.

Revenge is really unhelpful. You piss off them while ensuring that you get a bad rep with others. Hell, "them" could turn into "others" any day now. People move on to new jobs. Do you want to lose a deal because someone remembers you only as that jerk who screwed over their last company?

Since you've decided that you don't care about going after them over the contract, you can achieve the same non-paying result while at least earning the good recommendation you deserve. Do that recon talk, looking for an opportunity to gracefully offer a "discount". For example, many companies offer their Net 60+ customers a deep discount for paying in full substantially sooner than that. Maybe yours will be that "New account 'throw one in extra'" discount you forgot to mention. Whatever. The point is, the customer can feel happy for getting a good deal and not having to think about this bill ever again, while the biller can feel happy about avoiding carrying costs, tense negotiations, unhappy clients, etc. You stilll don't get your money, but at least you wring a "win" out of a bad situation.

Cut this client loose immediately after you get the check. They WILL do this again, especially if they conclude that such unprofessional behavior can earn more discounts. You want to be remembered well, but not as a sucker. With the next client, you won't have this problem, because you're going to get everything in writing.
posted by nakedcodemonkey at 11:05 PM on September 27, 2007 [1 favorite]

That is really good advice from nakedcodemonkey.
posted by i_am_joe's_spleen at 11:26 PM on September 27, 2007