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Termination provisions in contract

     
3:24 am on Feb 17, 2003 (gmt 0)

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Just wondering what sort of termination provisions people are including in their contracts. In a situation where there is an upfront payment, what should be done if the client chooses to stop the development 2 weeks later? Should the payment be refunded and the client billed for any time spent?
4:27 am on Feb 17, 2003 (gmt 0)

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WebmasterWorld Administrator martinibuster is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

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I'm not a lawyer, but there are others around here who are and can perhaps shed more light.

However, my understanding of contracts is that a contract is an agreement between two parties, each of which is giving something exchange for something else. The point to keep in mind is the giving and receiving: the exchange.

I am not giving you legal advice, but my understanding is that you can't have a valid contract if one party is giving something, and not receiving something in exchange.

It is in your best interest to have a contract with terms that are the most favorable to you, but structured with the concept of exchange.

If you structure your contract in a performance based manner, that is, you're paid in increments upon reaching agreed upon performance benchmarks, then this really isn't an issue. According to that type of contract, you are paid upon delivery of the product.

You're getting into messy territory if you're being paid up front for the whole deal. Just my opinion, but there's something unprofessional about that practice.

2:12 pm on Feb 17, 2003 (gmt 0)

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The agreement that I have made (verbally) is that I will get a third of the money up front, another third half way, and the rest once the site is completed. Are you suggesting that I don't take any money upfront, martinibuster?
8:26 pm on Feb 18, 2003 (gmt 0)

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Jake:

Take the verbal agreement and write it down into a letter of agreement at the VERY least. If the client has any problem with that...its a Bad Risk. Run away! Check your average psychology book: anybody who says, "but my word is bond and I never lie" - they're lying. Serious business people respect that.

Taking money down is just good business sense; do some number crunching with your savings account % vs. the clients to see why. What's your credit card at? 18.5%? That's one way to measure what its costing you when your receivables are late... And think about the hassles of small claims court if things go bad. You do all the work, and have no one to sell it to... (Maybe Martini hasn't been stiffed by a small client yet, but I have.) And you know what? Every single client worth their salt is HAPPY to pay money down to retain our services. Anyone who won't is a Bad Bet.

Jake, if you're worried about the contractee changing their mind in 2 weeks, put it into the contact: say "All
payments are non-refundable except in the case of breach by the Consultant (you)"

You want justification for that? Simple: whether or not you do the work, you've spent or wasted your time on this client! Time is ALL you have to sell! That's the least they owe you.

Again, they don't want to agree to that, move on. Believe me, there's tons of work out there once you start looking. And the more you act like that, the more respect you get. The key to negiotation is being ready and able to walk away, every time.

All that being said, I'm current smashing my head against a desk trying to lay out the terms in a longer contract... but what I laid out above, I'm absolutely sure of.

8:49 pm on Feb 18, 2003 (gmt 0)

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Thanks for the reply undead, I have added a section to the contract that states the client can recieve a refund of he inital downpayment if they give me written notice within 15 days of the sigining. It also states that they will be billed at my hourly rate for any work I have done which will be taken from that deposit. This seems like a good compromise to me.