Concerned about defamation resulting from a contract dispute

[Sara007]

My jurisdiction is: Washington, DC

I need advice about actions I can take regarding defamation/damage to my reputation in retaliation for my refusal to issue a full refund in connection with services/work product under a specific contract.

I recently posted a couple of threads in the contracts section concerning the background of this issue and will do my best to summarize the situation here:

1. I'm a writer/editor and entered into a contract related to the production of a specific type of document. There was no refund clause in the contract (and with the exception of the recent situation, I've never had a request for a refund or encountered this situation in all the years I've been doing business.

2. In order to produce the document, I required input and information from the (now former) client. This information wasn't delivered despite my request and an e-mail from the client saying that he would provide it.

3. Ten days after the last time the client informed me that he would provide the information, he abruptly terminated my services via e-mal stating that he didn't want to work with me anymore, asking me not to send any further documents, and requesting a full refund.

4. I responded by saying that although I was (and am) under no obligation to provide a refund of any kind, I would be willing to issue a partial refund in consideration of the ex-client's acknowledgement that the partial refund would be the only refund and signature of a release of claims.

After receiving my response, the ex-client said that a partial refund wasn't sufficient and then irrationally said he would "reconsider" working with me if I confirmed a specific date that i would deliver the document contracted for. Given the ex-client's behavior and failure to provide the information needed to produce the document and my real concern that I would invest more time and effort in the job and face further demands from the ex-client, I had no interest in this proposition and chose to ignore the communication.

5. I then proceeded to send a release of claims to the ex-client per my earlier communication and said that he had a week to sign and return the document or it would be null and void. He didn't respond.

6. Then a few days later I was contacted by someone from a website that I have been associated with regarding the ex-client's complaint. The website is an intemediary and refers clients for a % commission. The person asserted that I owed his website the commission fee and that based on what the ex-client had told him, I also owed him a full refund. At the same time, he said that he wanted to hear my side of the story. I shared some basic facts regarding the situation and also forwarded proof that my ex-client didn't contact me through the website, which meant that I didn't owe them the commission and that they were, in effect, a third party that had nothing to do with the dispute. Even though I was able to clarify the situation, I still feel that my reputation has been damaged. It is also clear to me that the ex-client got the name of the website through googling my name in an attempt to get the names of anyone I do business with so that he can damage my reputation.

7. I was also recently contacted by another party with whom I do business regarding this matter. That party affirmed that they would have nothing to do with it; however, the complaint would be noted for the record and could have future implications. I asked to go on the reccord with my own response, which I will be sending them shortly. In this case, I was able to see what the ex-client wrote about me, and one thing that stood out was that he considered it unethical for me to require his signature on a release of claims document in exchange for the partial refund and characterized it as such without providing the full details about the situation. Therefore, I feel that this person's perceives that the best way to force me into giving him a full refund is to go after my reputation by badmouthing me.

At this point, my question is whether or not I should send an e-mail/letter informing him that I am aware of his recent attempts to involve unrelated third parties in the dispute, which is completely out of line, and that in addition, I am prepared to take whatever steps nececessary to protect my professional reputation. My intention is not to threaten this person, but rather put him on notice that I know what he's doing and that there may be consequences. I am also aware that I can also simply ignore what the ex-client is doing and wait for the day that he either drops the matter or takes me to small claims court. Although the amount of money is hardly worth the effort, based on the irrational behavior of the ex-client, it is entirely possible.

Thanks in advance for your advice.

P.S. The ex-client is temporarily residing outside of the country, and I only have an e-mail address; however, I have reason to believe that he will return to the U.S. in the next 6-12 months. And if I'm correct, the statute of limitations for contract disputes in Washington, DC is three years. Please take this information into account. Thanks.

 

[dee_dub]

he considered it unethical for me to require his signature on a release of claims document in exchange for the partial refund and characterized it as such without providing the full details about the situation. Therefore, I feel that this person's perceives that the best way to force me into giving him a full refund is to go after my reputation by badmouthing me.

Or he could just be dumb. It's not unethical, and is downright common practice, to include a mutual release of claims as part of a settlement.

my question is whether or not I should send an e-mail/letter informing him that I am aware of his recent attempts to involve unrelated third parties in the dispute, which is completely out of line, and that in addition, I am prepared to take whatever steps nececessary to protect my professional reputation.

Legally, he's allowed to communicate with other people. He's not allowed to lie about the situation. If he just told the third party that you insisted on a release as part of the settlement and he thought that was unethical, he's not lying. The first part is fact, and the second part is arguably opinion which he is entitled to express.

Tactically, I think, as mentioned before, this "protect your professional reputation" line verges on being a hollow threat, and might only serve to stir him up.

Here's a question for you: other than the fact the contract is silent about refund, why do you think you are entitled to keep the entire sum paid? Yes, he didn't give you the information you required to produce the document. But what had you produced for the client, prior to this failure to communicate, such that you feel you've given substantially the whole value of the contract?

 

[Sara007]

Thank you for your response, dee_dub.

Regarding your first comment, I fully agree. This person may be dumb or at the minimum, not prudent because he obviously didn't seek legal advice if he wasn't familiar with the concept of a release of claims in this type of matter. Also, based on my dealings with him, I believe the person is unreasonable all the way around and thinks he can unilaterally get what he wants without any consideration for the work I have provided --which goes to your second comment/question.

I did provide a partial work product (draft document) to the ex-client. I may have forgotten to mention the details in this thread (I believe I did in the Contracts thread). Ten days before the ex-client terminated my services via an angry e-mail stating that he didn't want to work with me anymore, told me not to send him any further documents, and requested a full refund, I furnished him with a draft document of the document described in the contract. At that time, I asked for additional information necessary to complete the work. The ex-client responded immediately (the same day) and cordially told me that he would deliver the information to me later that week. He did not deliver any information or communicate with me, and the next communication I received was the one terminating my services. Therefore, I believe I am entitled to keep part, if not all of the sum paid in connection with the work. Not only did I provide a work product (albeit partial as the full product depended on input provided by the ex-client and he was clearly uncooperative and did not keep his word), but also my services were terminated. You had mentioned in the contracts section something about my acceptance of said termination, and I did acknoweldge and accept that. And as you know, even though I believe that under the contract I was (and am not) obligated in any way to provide a refund, I did offer the ex-client a partial refund. What more can I do in this situation, and why would I not be entitled to keep some or all of the money paid in connection with the contract when again, a partial work product was delivered and my services were terminated by the ex-client? Personally, taking the actions of the ex-client into account (which are all documented in writing), I think there is a strong case for my keeping all or at the minimum, part of the funds paid, but then again I'm not a lawyer.

What would you advise in this situation? Thanks.

 

[dee_dub]

What more can I do in this situation, and why would I not be entitled to keep some or all of the money paid in connection with the contract when again, a partial work product was delivered and my services were terminated by the ex-client?

I'm just throwing ideas out here. What more you could do is offer a greater (or entire) refund. Sounds like you don't want to do that, and maybe for good reason. I don't know what all your arrangement was and how much of it was completed. Can you put a percentage figure on the partial work product?

What would you advise in this situation?

Decide whether you want the money or his silence.

If you want to shut him up, sounds like paying him off would be your easiest option. If you want to keep some of the payment you feel entitled to (and I'm not saying you're wrong), then he's going to squawk about it. From what I've read here so far, his squawking doesn't sound like defamation to me. You can advise him your position is that it IS defamation, and that you will take any steps necessary to protect your reputation, but I have doubts that it will work because a) he appears to be unreasonable, and b) to the extent he may be reasonable, he might look on that as an idle threat. So if you keep more than he thinks you're entitled to you might have to put up with his noises.

 

[Sara007]

Thank you for your response, dee_dub.

I absolutely do not feel that the ex-client is entitled to a full refund for the reasons I've already outlined in this thread and the one in the contracts forum (work performed and ex-client's decision to terminate services/the contract). Regarding your question about the percentage figure related to the partial work product, it's difficult to pinpoint, but I would say that it is around 50% (perhaps more, depending on the assessment criteria), but definitely not less than 40-45%. Therefore, when I offered a 50% refund, in my view, the figure was more than fair. By the same token, it should also be taken into account that the ex-client terminated services while work was in progress. It was his decision, and regardless of whether I delivered 10%, 50%, or 90%, I continued to hold up my end of the deal, so I don't feel that I should be penalized. Last but not least, the contract itself made no mention of a refund (and at no time prior to the client's request for one did I ever promise or offer one), so I do think the ex-client should assume responsibility for his actions in terminating my services while the work was in process. My two cents as a non-lawyer, of course.


Regarding your second point and advice, I see what you're saying. But concerning paying him off, I don't see how that can be done while at the same time protecting my interests. Precisely because this person is unreasonable and doesn't appear to understand what a release of claims is (if you consider what he said about it to third parties when I offered a partial refund and required it), I don't see how even offering a full refund at this point would make him stop badmouthing me. And I definitely would not agree to issue a full refund (or any type of refund for that matter) without getting a release of claims.

To some extent, thus far, you may be right that the ex-client's badmouthing me hasn't sufficiently hurt me such that it would constitute defamation. Going forward, it isn't clear to me what he will be able to accomplish in attempting to damage my reputation although the internet can reach a wide audience (and I don't know what recourse there is given the particular circumstances of the ex-client's whereabouts, etc.). The more I think about it, given that the ex-client is so unreasonable, at the moment the best thing to do may be to simply ignore him. Then if he's foolish enough to take me to court (and it would be small claims) for the contract issue,I can just take my chances. Personally, I think he should have taken the partial refund when I offered it.

Thank you very much for your advice and also for helping me evaluate my options in this situation.