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Professional Webmaster Business Issues Forum

    
client not paying for work on site
remove site, stop emails, transfer domain
barney977




msg:3786386
 4:51 pm on Nov 14, 2008 (gmt 0)

Hi everyone,

I was wondering if anyone has experience with dealing with a non paying customer. I have been working with a client for over 1.5 years on their site. Since August they have become difficult with payment although the feedback has always been they are happy with my service.

They have not paid me for an invoice which is over 3 months overdue now.

I have told them I am not happy with this situation and need payment. I have control over their webserver (hosted with a company they pay but i setup) , over all of their emails and the content for their website. So far I have taken their site back to how it was in August which covers all of the work they have paid for. I have also threatened legal action.

What I would like to know is, where do I stand legally if I take their site down completely, stop their emails and with-hold their domain. I must add this site is very high profile if that all effects this situation.

Please could someone advise.

My thoughts are if they do not pay, then am I entitled to take their domain and auction it as it is a famous name and am sure it would fetch for some good money.

I would appreciate any advice any has to offer. The last thing I want is for them to sue me for loss of business for taking their email and site down even though they owe me.

It is such a shame things get like this, clients are so demanding with their deadlines for work to be done and get have no regard for our deadlines for payment.

 

LifeinAsia




msg:3786429
 5:43 pm on Nov 14, 2008 (gmt 0)

Welcome to Webmaster World!

(As you read this, keep in mind IANAL.)

I was wondering if anyone has experience with dealing with a non paying customer.

Yes- there's a new thread on this every few months or so. Just do a search and see the various ways other people have handled this.

The main thing is this: exactly what does your written contract say regarding the work, payment schedule, and repercussions for non-payment? Stick to the contract, and you'll be safe (or at least a lot safer than not sticking to the contract).

And as you can gather from the other threads, one of the most frequent comments is "I don't have a contract." If this also applies to you, start planning to chalk it up as an expensive learning experience. But to prevent it from being even more expensive than it needs to be, read on.

I have taken their site back to how it was in August which covers all of the work they have paid for.

That's probably safe footing- they're not entitled to what they haven't paid for. (That's assuming you haven't removed any content that they added since then.)

I have control over their webserver

Control and contractual responsibility are two different things. If part of your payment includes hosting and they haven't paid for it, then pulling the plug is an option for leverage. However, it sounds like they are paying a hosting company directly. If that's the case, taking their site down is probably asking (if not begging) for a lawsuit, including damages in the amount of (their) lost revenue.

am I entitled to take their domain and auction it

Are you the actual owner of the domain? If not, then you would most likely be risking criminal fraud and theft charges.

[edited by: LifeinAsia at 5:47 pm (utc) on Nov. 14, 2008]

Korrd




msg:3786469
 6:42 pm on Nov 14, 2008 (gmt 0)

IANAL but don't do it. Taking down their site or selling their domain name will open you up to more liability than you've already acquired by reverting their site. That the site is hosted on their server means that once you uploaded the content you had made delivery. The client has given you access to their server to perform services for them. Unless you have a contract allowing you to remove content for nonpayment doing so was misuse of that access and you could be held legally responsible. You will certainly be held responsible for removing already paid for content or selling their domain name.

But I assume that the fact you are considering selling their domain name means you own it? If so they are renting it's use from you and you could turn off that service for nonpayment by pointing it to your own server to show a "site currently unavailable" message. But stay professional. Don't be tempted to badmouth the client by adding "for nonpayment" or such.

minnapple




msg:3786650
 4:17 am on Nov 15, 2008 (gmt 0)

It doesn't sound like you are going to get paid so I would walk away and write off the debt and leave it at that.

I have performed aggressive tactics in the past on non payments, but none of them produced any real financial benefits.

I would suggest you modify your payment contracts so you paid a percent of the total before publishing.

vincevincevince




msg:3786658
 4:48 am on Nov 15, 2008 (gmt 0)

Depending on where you live, legal options may be cheap and straightforward. In many countries, small money claims are made at a very affordable fixed fee and without the need for a lawyer. In the UK, the Money Claim service can be started 24/7 over the internet and paid for by credit or debit card.

You may have some form of interest or penalty built into the contract. In some countries, there is a legally defined rate for overdue invoices. Issue a new invoice showing the penalties and interest you are entitled to and send it to the client. This ensures that there are financial consequences of delaying payment. Whilst delaying payment does not hit the client's pocket he has no incentive to pay.

It seems likely to me that your client is experiencing a cash-flow crisis. Depending on his industry it may be a knock-on effect of the decreased availability of credit to SMEs. If that is the case then forcing a court judgement may push him into bankruptcy and leave you both with nothing.

You may have gone too far down the burn-the-bridges route to have a straightforward discussion. Three months, unfortunately, is not an exceedingly long time for a SME invoice to be overdue in this business.

Where possible, your best option is definitely to have a chat to the client. Preferably face-to-face over coffee, if not then on the phone - don't do it by email, messenger or post. Throw them a rope and ask them how things are with their business and if they've been affected by the recession.

Be understanding and tell them that you do realise the difficulties. Offer to work with the client to come up with a payment schedule that will suit you both - probably where they pay about 80% of the total invoice spread over a few months (80% in three months is a lot more than 0% ever). Your client may be able to offer you non-cash value for part of the invoice, depending on the nature of his business; this could include professional services, equity or product stock. If you come to an agreement, get it documented and signed.

Fortune Hunter




msg:3787292
 3:12 pm on Nov 16, 2008 (gmt 0)

Are you the actual owner of the domain? If not, then you would most likely be risking criminal fraud and theft charges.

I agree with this 100%, don't do it unless you own the domain and have a well written agreement that explains that you own it and they are simply "renting" it from you. If you don't have this and you end up selling it then you could open yourself up to a serious law suit that would be beyond your ability to fix. Remember a web site can be put back up as a settlement option to keep a law suit from getting too out of hand, but a sold domain is probably gone forever and there is little if anything you could offer as a settlement to fix this.

One argument that their attorney can make is that any payment they have made in the past covered your fees for the domain name, especially since presumably that was 1 1/2 years ago and therefore they own it and you owe them for damages if you sell it. Don't do it, you will seriously regret your decision. In this business if you get a reputation for holding domain names hostage you can ruin your business almost instantly.

Your client may be able to offer you non-cash value for part of the invoice, depending on the nature of his business; this could include professional services, equity or product stock.

This is a great idea, that I had never thought of, thanks for the suggestion.

barney977




msg:3787799
 9:47 am on Nov 17, 2008 (gmt 0)

Hi everyone, thank you so much for all of your advice. Reading through it all, I am pleased I have kept within the law and only returned their website to the point where they had paid.

In terms of contract the only thing I have is that it says on the invoice payment must be made within 10 days which I know is not really contract as such.

I have been in contact with a solicitor and have sent out a 7 day letter before action. This will go out today and then I will take them to small claims court. I have kept all correspondence between them and myself in terms of commissioning the job and approving the cost and then the work on completion.

The trouble with this company is that it is owned by people who are known multi millionaires. I know the money is there but I think they are trying to get the company cash flow to a more healthy state by not paying suppliers like myself.

Fortune Hunter




msg:3788212
 8:32 pm on Nov 17, 2008 (gmt 0)

The trouble with this company is that it is owned by people who are known multi millionaires. I know the money is there but I think they are trying to get the company cash flow to a more healthy state by not paying suppliers like myself.

Yes, I have been there as well. I had (notice the past tense) a client that used to drive to their office each day in a Mercedes, lived in a huge custom built home on 70 acres of land, fly to Europe every summer all the while telling me that were strapped for cash and couldn't pay. My invoices ran like 90 days plus with them all the time. I finally cut them loose and told them they could abuse another developer and not pay them, that I wasn't keeping that job any longer.

bilalseo




msg:3789828
 6:59 pm on Nov 19, 2008 (gmt 0)

it is illegal to use someones brand name or to sell domain that holds a brand name wihout prior approval. If you are local, you will face up a legal sue... :(

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