Contract Dispute

[steve-parrott]

I'm the Marketing Director for a manufacturer. One of our customers wanted advice on a web site under development. I looked at the site and it was terrible (white on black text, everything centered, terrible navigation, buttons that jumped away when you tried to click them–one of the worst site I'd seen in that industry) so I told him so and advised that he start over again with a new designer.

The designer he hired had given him a cut rate ($400-$600), and had gone on to make requested changes that increased the cost to $1,875 (8 drafts total before I saw the site). The business owner had paid $750 and still owes the rest. The businessman didn't want to put good money after bad, so he put a hold on paying for the work done. When the designer saw he wasn't going to get paid, he pulled the site off the server and now threatens collection.

Add to this that there was no contract signed.

Since I stuck my nose into his business and helped stir up this mess, I thought I would kindly ask the gurus on this forum to give some advice.

Does the client have any recourse when he is unhappy with the final product, judging it to be substandard even after 8 drafts?

If the designer agrees or is forced to accept less than full payment, do the html files and images belong to the designer or the client?

Are there any articles on the web that speak to these issues?

[incrediblehelp]

Originally Posted by steve-parrott

Add to this that there was no contract signed.

This is going to be the problem. It is hard to know (prove) who did what at what rate with no actual contract being signed.

[rms7design]

as a web developer.... if a client does not pay for the work done... I also pull down the website..... of course every work and/or additional work would have been requested and/or approved by the client. E-mails can be a base to decide whether or not the client and developer had agreed on additional work and at which rate....

my 2 cents

[RCarpadus]

Having been involved with having to take over some one elses poor work (we specialize in upgrades and redesigns), I can tell you that this is some of the info that the client should have together as well as a timeline of who did what when.

Here are some questions that need to be answered. What were the terms of the verbal agreement? Were there any witnesses to this? Is there anything in writing or email as to terms and conditions? Are the changes by change order or some other form? Is there a recept for the $750 and does it refer to what it was for? Who else has seen the work and what are their opinions? Has anything been cashed anywhere that he can get a screen shot of?

Without a contract (depending on the state) the designer is most likely bluffing. I would have your customer threaten the designer with small claims action for the $750 to get him to back off the collection threats. Most courts will support a claim based on refusal to accept unsatifactory work.

Also, with out a contract, the ownership of designs is really in question. Works created for pay do not always transfer rights. Just because you own a Rembrandt, doesn't give you the right to copy and sell it or use it for commercial purposes. The same can hold true for graffic work done for pay.
If they are bad designs, who cares who owns them.

nolo press a do-it-yourself legal information publisher/provider www.nolo.com might be able to provide your customer with the info he needs.

Good Luck

[dburdon]

Staged payments may have helped. But sadly this is probably a based around a misunderstanding. Clients rarely give a completely comprehensive brief. And web companies rarely anticipate the full amount of work involved.

[davewj2o]

Never start a fight with a person who can pull down your website. Change passwords, make copies, then start your reasonable discussions.

Also, if the person doesn't have a good grasp of what quality is in the first place then they sure aren't going to understand your argument.

[edhan]

When there is no contract and based on verbal agreement, it tends to have such outcome. In the point of the web designer, he might have encountered too many of such incidents where customer does not pay completely when the work is done. Sometimes client is not clear about what is needed to be done and add additional work that need additional cost. That does happen to me when client requested to do just one thing but ended up giving more than 3 things.

I do believe this can be resolved by talking it over what to be done and stating partial payment for the amount of work completed.

[G[dot]com]

It is difficult to advise you when we have no least idea on who the client is and who the designer is. I mean, your story doesn´t have pillars where to establish a sort of judgement and advise you what to do.

The designer for your description sounds problematic (how did he permit that an inital ~500 quote would become 1800?). But, as well, we have a client who:

1) comes from having a terrible website online (for which he might have liked that he surely paid coins to get it done) 2) is not too willing to having to rebuild or redo the old bad site (these kind of clients are most problematic, as they think that the new designer should somehow consider the money they already spent with the previous designer!) 3) After 8 drafts is he still unhappy???

The story MUST be little more complex than what you tell us. I welcome a post in extenso with the details of it.

I think that the lack of contract is a detail here. That is not the problem. The problem is the parts envolved. And even with a contract in hands, both parties would have surely interpreted different things on what the contract stated.

I don´t know the designer, I just tell you that having the website in my hands -hosting passwords and stuff- until I cash the last payment arranged, is the only guarantee I have to secure my payment.

People are afraid about getting a designer that may deceive them (pay and get no work done). I assure you that designers are even more afraid of clients who ask for work they never want to pay (at all or for the cost they previously accepted).

My only advice here and now: if you know the story only from the client´s side, doubt that you are getting the whole picture on what is really happening. It would be interesting that you contacted the designer too. (or viceversa in the inverse case).

Hope it helps, and I am sorry for the mishap.

[scanmonkey]

I believe that you customer should attempt to negociate the balance down from $1125 if he hasn't received what he agreed to pay for.

Make sure that he gets a signed agreement including copyright and everything burned to cd.

Your customer takes some responsibility as he accepted 8 drafts. I would have just told the guy to stop at the original quote.

[DrTandem1]

The way I work is 50% of the estimate and the balance upon completion. I don't start work or accept payment, until the client is satisfied with the sample layout. This gives both of us some time in getting used to how each other works. Then I require the 50% up front before I start work.

Their site is usually up and running before I receive final payment. Is that a gamble? Maybe, but I think I get to know the client fairly well by that time. Another plus is the vast majority of my work is referred to me by previous clients.

I have also repaired work done by others. I have never been burned by a non-paying client. If I ever was burned, I doubt I would pull their site down. I would most likely advise the person who referred them to me of the situation.

Also, they would not receive the work-product files (art, fonts, etc.) that are needed to advance the site in the future. Therefore, any substantial changes would be difficult to complete and still look good.

In this situation, I would tell the client to move forward. It sounds like the first web designer is like a contractor that can't stick to the budget and doesn't do the work. The client should have stopped before paying more money. That's why a 50/50 arrangement works so much better. Both parties have a vested interest in finishing the site

[sdrury]

It obviously speaks volumes about the professionalism of the supposed designer anyway that no written agreement or terms were ever presented to the client.

All web solutions provided should really be approached as a "project" - a piece of work with an objective, definitions, plan and implementation phases, a finite end date and budget.
If a web company is not able to effectively help define and agree the project from the start then they are not serious about their business. Sure unforseen situations and risks can arise - however these need to be factored in at the definition phase and agreed.
A client should really also expect no less - in the UK the legal arguement would certainly be in favour of the client in this situation under the sale of goods and services act.

Unfortunately this guy has got very badly stung, and unless any easily accesible US law sways in his favour it is a case of encountering a website hustler.Lesson learnt.

[MacTheKnife]

There IS a supply contract here (even if only verbal) between your Customer and the Developer. Although any documented history will be very important, e.g. an early e-mail, say, from Customer to Developer requesting a scope of work, or from Developer suggesting what they could do. And if either exists can any subsequent variance be demonstrated? Any court or arbitrator will bear in mind that all contracts must be reasonable and also that this is a business to business (not consumer) contract.

Presumably both parties have a reputation to protect and therefore are motivated to settle this as simply as possible. I would write to the Developer using a few choice words like “reasonable” whilst suggesting (implicitly or explicitly) I’d prefer to resolve this without taking further/legal action. It may help if an ‘expert’ third-party could comment on the standard of work provided (recognising this should give some balance). Such an expert could be the next (professional) developer your Customer plans to engage. I would hope a meaningful and creative negotiation would follow: It is vital to think of the Developer’s perspective, what would close this matter - not just in monetary terms (which would presumably be somewhere between -$750 and +$1125) but other factors too? Your Customer should aim-high whilst being privately clear beforehand on the full extent he will yield or compromise.

Does Customer have any live website now? Is he free to (re) create a site? If not Customer may have claim for consequential loss from Developer.

In summary, I would urge Customer to initially PLAN (prepare) his objective action, evaluate his power and endeavour to keep Developer in discussions (minimise conflict).

A most unfortunate supply chain.

Caveat Emptor – Buyer Beware

[Elva-Marie]

Morally the Developer should refund the money if the Client was not satisfied, or at least accept what he has already been paid and forget the rest. It’s a shame this happened, and is a lesson learned that will help parties be cautious the next time around.

I am not sure how the law would work in this case, but I am thinking that if the Client took the Developer to court, the Developer may win. He did do the work, 8 drafts of it, all of which took time and effort on his part and has a right to seek money for the work he did, whether he’ll win depends on how the case is presented. If the Client is very distraught, then he should contact a lawyer who practices in Internet Law and have them review the case.

As far as the graphics, etc. If the Client didn't pay for the work in full, whether the graphics, design or site was good or bad, then the copyright belongs to the creator of the artwork, which in this case is the Developer. If the Client provided their own text or photographs for the site, then that supplied information belongs to the Client and not the Developer.

Now, if the Developer is holding the Domain and/or Hosting hostage, then that's a different matter and actions can be taken at that point. There are several ways to handle that; it is just a matter of which will work best in this situation.

steve-parrott, I wish your customer the best of luck.

[CharlesRead]

Guys you are making this way to complicated.

Get a new designer to put up a new web site. If the old one was that bad it could not have generated much business. Hopefully your client owns his domain otherwise get a new one.

Tell the old designer to get stuffed and if he sues have your client's attorney counter sue for what was paid for bad work.

End of story

Good Luck

[weslinda]

Pretty simple in my eyes, start new, call it a lesson learned. I'm sure that the client would not ship product without a contract or purchase order in place, and therefore I'm amazed that sometimes people will do that with web sites.

People think they are getting a great deal for a $500 web site. And then worry when things go wrong and the price gets raised.

Your friend should have reviewed previous work of this designer and seen if it appeared he could handle the task, also, he should have a put a contract in place.

Start over and learn from the lesson. I have a client at the moment that spent $3500 on a "flash web site" that was simply awful. And it allowed them no functionality for SEO and no way to manage customers, orders, nothing.

I approached them because it happened to be a product my wife was looking at and loved, but the site truly stunk. They ate the loss, and now how a site that they love, and will help them run their business. The client will spend close to $15k wit me this year. Not a bad result on my behalf, but people must see how a web site is really about their business, and they should spend as much if not more on that than they will for yellow page ads or brochures, or banners in their store.

[Paul B]

Originally Posted by CharlesRead

Guys you are making this way to complicated.

Get a new designer to put up a new web site. If the old one was that bad it could not have generated much business. Hopefully your client owns his domain otherwise get a new one.

Tell the old designer to get stuffed and if he sues have your client's attorney counter sue for what was paid for bad work.

End of story

Good Luck

This is assuming the client has the intelligence to know and do this. It seems that 8 drafts and changes that amounted to double the quote suggests a total lack of communication in both directions.

I quote, then advise before I go a cent over budget and get written approval (by email) for any overspend before starting.

That said, I have still quoted and had clients actually say they were delighted with the results, but pay only half the bill because they "thought is was too high" or "they decided to shelve the project" etc - even though it was exactly what they asked for and my bill exactly what I quoted.

I have pulled 3 sites over the years for non-payment. Payment was made within 24 hours without further complaint. Needless to say I refused all further work from these parties.

[steve-parrott]

Thanks friends, all good and generous advice!

[Keimos]

Hello Steve,
Thought I would add my tuppence worth.

Does the client have any recourse when he is unhappy with the final product, judging it to be substandard even after 8 drafts?

The client has already paid more than the original amount quoted to start, so firstly your designer had no right to stop services and should not have the right to any materials produced.

Secondly, if the businessman was contacted and informed about the changes and agreed to them, work in progress, he should pay up.

Basically, just guessing, he liked the new look was informed of changes and expenses that would improve ranking but has yet to see results?

This goes back to the original agreement, although not contracted, as it should have been. Has the designer delivered what he promised by undertaking to do the work.

The business man if not satisfied has the right to withold payment until he sees the results of the first agreement. It is up to your designer to provide that.

Lesson 1 for all. Design under contract or written agreement. Verbal agreements are up to the honesty of the individuals involved.

Who is the wronged party here? Is the question!!!!!

Keimos

[RFA]

As someone mentioned earlier... there is too many bad payers.... and therefore, we designers, take some pre-emptive action (please no reference to the war). I had the very same situation were a client had me done a ton of work... no contract, only emails, client living 2000 miles away and finally said.. I don't pay you for some obscure, baseless excuses and finally to say... just try to sue me in my state.... if you dare... I was just starting my company, no money to spend on lawyers, etc.... from there on I decided to have a contract prepared by a lawyer, put in place payment disposition (50% down, 25% mid-deadline and balance before delivery) BUT... when I deal with a client, he/she has a proposal which is part of the contract, general agreement and also all the info about what is included... certainly that this web designer... started his own company... did not put inplace anything, made a lower price to get the client... found out it was more work than anticipated and without contract could not say that only 3 comps were included instead of 8... anyway I have no idea about that.. but once again.. be informed and be up-front with the client... the more precise, the better... my 2 cents worth..

[iwebgeek]

I'm agreeing with everyone here.. have a contract in place and signed by both parties before you begin work. Clearly outline the process and how many drafts and revisions are included, plus the maximum amount of hours.

It's my typical practice to estimate the hours and cost, write the contract, get them to sign it. Then IF the project goes over the estimated hours or cost, I stop work and get another signature on the extra cost before proceeding.

I also get 50% up front, and 50% at completion of projects.

SOME people I will do a different deal, like 1/3 at beginning, 1/3 at middle, and 1/3 at end, or sometimes I'll do it on credit and get paid in the end. But that's ONLY with people or companies I explicitly trust and have had a relationship with for a LONG time.
For example, Orange Coast Hardware is my dad's employer and I've known literally EVERYONE there since I was a wee kid, and I personally know the owner. So I do work for them on credit and just bill them at the end. They always pay promptly, so it all works out fine.

I can't say the same for some other clients, though. Some have paid late, checks bounced, withheld payment, etc.

If the money wasn't so good, I wouldn't want to deal with the hassle of being self employed.

[selnyc]

I have never had a client who understood a lick of what it is we do. Most undervalue our skill sets and hard-won knowledge of how to make a site work.

I learned quickly—by my fourth job—that no contract means no clear-cut resolution in my favor