Website made, client won't pay.

[redhed123]

Ok, so this is my first big project, and my first with a contract. I'm a programmer by trade, and picked this up on the side. We have a contract, made by him, my first mistake. I'll try to keep this short. Contract says we follow the laws of NJ. I am in NY. There is a binding arbitration clause that does not name a specific arbitrator. He outright says he will not pay the balance ($6k). I have already received $4k as down payment. The website, as loosely outlined in the contract, is about 95% complete, and the "termination of contract" notice by email came as a complete surprise. He claims it is because it is 4 months late (and the last month of that, he has been dodging my calls and emails). The contract states an "estimated" due date, and numerous emails after that due date never mention it again. We verbally agreed the date to finish was flexible. So I tell him he has to pay or I'm taking it further. He basically says "fine, go to arbitration, but give me back my $4k deposit". Also, one of my many mistakes, is that he was the one paying for hosting, and therefore has the code still. He has the working website and my money.

*big sigh*

I think ultimately I will go to arbitration, which I had never heard of before this contract. But I want to know what steps I can take before going that far (if any). Please help.

-Utterly Depressed and Desperate for Help

 

[Michael Wechsler]

Don't worry so much about this and calm down. Everything will be OK. It's only money and a very small amount in comparison to what you will earn.

Is there anything in the agreement with regard to ownership of the work? As of right now, if he hasn't paid you for the code, he may not technically "own" the copyright to the work. You have a valid claim that he breached the contract and you may want to inform him of this and the fact that, if he doesn't pay, he will be required to take the web site down. If you decide to go to arbitration, there is absolutely no reason for you to give him a penny back. If he refuses to comply your remedy is simple - a takedown notice to the host, informing them that the code on the server is owned by you. No host wants to get involved and you just need to follow the format which you can find in the forums by searching "DMCA" and "Letter." Good luck and don't worry - you'll get the money you deserve.

 

[redhed123]

More questions

The "termination of contract" was through email and stated the following. FYI, The letter sent to my mailing address was never received, so was obviously not certified.
"Dear C,
The completion date for the design contract was dated 31st day of May
2008 as per paragraph 2 of the design contract. As of today, you are
4 months late to complete the website functionality as described in
paragraph 3 of the design contract. I sent a letter to your mailing
address two weeks ago describing these points also. Per the contract
terms, the design agreement is now terminated. The deposit for the
project is refundable per our agreement, but in order to exit this
relationship on amicable terms, I am choosing not to pursue this
matter.
Best regards, D"
I sent a reply that can be summed up by saying "No way dude" and his reply to that can be summarized with "Yes way, and I want my deposit back".

The contract isn't long, so I'll highlight the parts I think are important.

First, as far as the client's (called D from now on) complaint of lateness, the contract states the following:
"Starting date is 21st day of March, 2008 and estimated completion date is 31st day of May, 2008 for the total amount of $10k. D shall pay consultant $4k as a deposit for project commencement. The balance of $6k is due on completion date, and upon file relinquishment, or upload and/or assembly of website on D's web server. Consultant agrees to deliver samples of design on dates as agreed upon in the proposal. Consultant will make every effort to meet agreed upon due dates."

So my main questions for this are: Does this imply a refundable deposit or non-refundable? and Does it sound like I did not uphold my end of the contract if I was late? The "termination of contract" email I received was the first mention of me being late, and there were several emails after the May 31st estimated deadline.

And as for ownership, the contract states:
"Copyright is in D's name. Upon completion of Work, the copyright will be released and a CD containing all source code will be delivered to D by Consultant."

So, does this mean the code is mine until he pays? And I can send a take-down notice? And if I send that notice, am I then forfeiting the need for him to pay me the rest of the money if he decides he no longer wants the code? I still spent a lot of time doing the work, I would think he owes me for my time. Basically, does he have a leg to stand on in arbitration? Everybody I ask (non-legal types) makes it sound like I have all the cards, and he has nothing.

I really appreciate the help. I can see from some of your other posts, you are very helpful to others, and us law-laymen are very gracious.

 

[Michael Wechsler]

You're welcome and glad to hear.

There is a great deal that is debatable here but you've got the key words where you need them. I'm not sure that "every effort" means "best efforts" but it doesn't matter - there is no firm date where you must deliver by that date. Your efforts could be reasonable as well as reliant on the client's delays as well, etc. So you can state that there is no firm date as well as the fact that the client has no rights to use the web site due to the clause you mentioned - good work!!

You might state this and the above clause, as well as something to this point - "If the web site was so unacceptable you wouldn't have been using it. Given understandable issues that arise in the course of a project and your own failures to communicate in a timely fashion, the delay is hardly in issue or you would have been vigilant to let me know that time was of the essence. The contract itself doesn't state a firm date and only that efforts would be made to accommodate. Even with my confidence in my position, I think it would be in both our best efforts to settle this amicably. In the spirit of doing so, and only for the purpose of settlement, I'd agree to a final payment of $___ made within X days. If this is not amenable to you and I do not receive said funds, I shall and will need to send a takedown notice to your hosting company and file a claim in the court in your county. I have done the research and please do not force me to go this route."

That might work and I hope it does. Let us know and good luck!

 

[redhed123]

That sounds great! I'm definitely going to write something just like that.

But should I warn him of the take-down notice? That will give him time to take the code off the server and move it elsewhere. He already has the coldfusion code backed up, for sure. That's the easy stuff because that is just drag-and-drop the text-only files to your computer. But the database stuff would take time and somebody who knows what they're doing. I'm not sure I want to give him that time.

What is a reasonable amount of time to give him for payment? I was thinking 2-3 weeks. And is it unreasonable or greedy of me just to demand the whole sum? I'm a little stubborn, and he has irritated me so much with this situation that I want him to pay. lol

Also, you say a great deal is debatable. Isn't that in my favor? How could it be interpreted in his favor?

Again, I appreciate all the help.

 

[redhed123]

I'm preparing to send the notice soon. Can somebody please answer the above questions I have? Thank you all.

 

[Michael Wechsler]

He'll likely back up the site even with a take down notice. The bottom line is that it can't be used anywhere and you can also go after him if he does. I don't see any reason why not to demand the entire amount to be paid within a week - but that's my opinion. I'm not sure why it's "greedy." If you did the work then you've got a right to get paid. If he wants to settle, then let him offer you something less that you'll accept. Best of luck.