Not the best route to handle this. Make sure you have a decent lawyer on hand (and a good contrct) when dealing with delinquent clients. Something like this will guarantee that you'll never get paid.
This video was the first thing I thought of when I read the article!
I once worked for someone who refused to pay me for my work and at first I didn't want to sue him because of several BS excuses:
- I never sued anyone before.
- He seemed like a nice guy.
- It was the first time I worked for him but he wasn't a total stranger to me
- He had offered me work before so I figured he's someone who's probably going to ask for my services again some time in the future.
- I knew he had worked with other people and I never heard them say bad things about the guy.
- It wasn't a lot of money.
Turns out this guy did it to everyone I talked to!
How did they get paid ?
By taking a haircut!
One guy didn't take a haircut but he did for a future project. He needed the money.
I'm not here to tell others what they should do but have some self-respect.
I sued him and I'm glad I did.
He didn't get a discount at all.
My lawyer doesn't come cheap, nor do interest payments.
Would I put that guy's name online?
No.
Invest your time in a good contract. Ask a percentage upfront. Watch the video.
Very true. I've been in a similar situation with a lot of money not being paid, and the client didn't care about their reputation being damaged. What they did care about was my lawyer.
It really depends on your personal situation and how much. If you're in the U.S., you'll have to check to see the min/max for suits in small claims court (this is generally anywhere from $3,000-$15,000). One thing that works, though, is merely having your lawyer draft a letter to the offending client. Your less intelligent clients will jump when they see any threat of legal action (and for you, it's only a few hundred bucks to get a lawyer to draft a letter – maybe even free depending on your relationship). There's certainly leg work involved, but when it's your livelihood, you have to do what you can.
Granted incredibly unlikely, but doesn't that open the possibility of:
* Rip off developer
* Hire incredibly expensive legal team/legal buddy[1] to find small enough loophole in contract
* Bill developer for cost of legal as well as rip them off
* Profit?
[1] How do jurisdictions that auto-award costs handle contingency claims? Is "£0 if I lose, or £1M/hour if we win" a legitimate billing rate? I can't imagine it could be.
I used to work for a company that put a late-payment clause right in the contract. If you didn't pay us you were on the hook for a fee plus interest on the outstanding balance. So essentially it was like owing money to the IRS.
As far as I know nobody ever gave us trouble about payment.
> I used to work for a company that put a late-payment clause right in the contract. If you didn't pay us you were on the hook for a fee plus interest on the outstanding balance.
This is so common in the business world -- terms -- that there's a short hand minilanguage for describing your terms on invoices, purchase orders and contracts.
The sad truth is that there are customers doing that on purpose not just to protect their own liquidity and cash flow but they hope that by not paying and making you wait they will literally dry you out into bankruptcy and ultimately they hope they won't have to pay then.
Government contracts, at least in certain countries here in Euroland, are NOTORIOUS for doing that to small and mid-sized companies. So make sure you always protect your interests, if possible get some money up-front, a part after a significant milestone and the rest upon completion. And ideally work at having a good standing and connection to the instance who can actually sign off on and pay what they owe you.
