Contract & Client issue...(Not mine)

[mikester]

A friend of mine runs a consulting business; they try to book their clients out a few weeks to make sure they have a good stream of income coming in.

When a client signs a contract my friend takes a deposit for a week's worth of work.

This deposit is then applied to the end of the contract.

This deposit reserve's my friend's time. Securing a job takes time and must be done well in advance for the kind of work he does.

My friend is provides some health services so if he is sick he usually arranges for some person like them to do the work with his clients. He has an organization that is sort of like an association of professionals and they are organized to support each other in this manner. So my friend was sick when scheduled to work the first week of a job. He arranged for a fill in which went very well. The clients seemed very happy with the fill in and with my friend (who did do some work for them prior to his own minor illness). The clients however decided that they no longer required my friend's services. The deposit is non-refundable; my friend has it worded that way in the contract because once he has the time booked he's going to turn down other work. If the clients can just ask for their money back the day before he's supposed to start working then he'll be screwed. Cultivating a job usually requires a few months notice and a series of interviews with the clients. Because of this the deposit is non-refundable.

The clients want their money back since they will not be using my friend's services. They of course paid the fill in at the rate my friend would have received had he done the work. Again, his 'association' of professionals worked out here. It's a fairly informal association but they are organized and advertise themselves as such to their clients.

The association wants this to work out positively for everyone and the clients to be 'happy'...this basically means my friend has to suck it up and take it. The contract is pretty simple, though I can't put it up here for you to read.

My friend is pretty irritated about this overall - he knows that he is right in keeping the deposit. He did in fact turn down work for this period of time and now he doesn't have anything else lined up.

I just want to kind of get a perspective and options of what different ways there may be to handle this.

My friend is considering offering them a refund of half of their money.

Personally, I think the contract is pretty clear - they are terminating it early and the deposit is designed for this exact scenario. Unfortunately I guess it isn't that simple.

[Hugh R]

As I read it, they paid the other guy for the services. They shouldn't have to pay twice because your friend got sick.

[mikester]

They have a contract that specifies work for a period of time, that period of time is written into the contract. The client is supposed to pay on a weekly basis. The deposit is applied to the end of the contract.

The client did not pay twice, they booked my friend for a period of time and are terminating the services early. Even if it were my friend who had been there for a week and been paid the question of the deposit would still be the same in this scenario (I believe).

[jwhcars]

I read that he takes a week non refundable deposit and applies that to the last week of the contract. In this case I read that the client paid the contract in full. They used one week that an assoc. filled in and now they no longer want any more service.
Take the first week and the last week and subtract it from the amount paid and send the client the difference. As stated the last week amount was to be the non refundable deposit not the whole contract.
Sometimes you have to give a little to gain a lot.

[ODDJOB UNO]

GET AN R.O. against them, specifically refusing them possession of firearms,deadly weapons and/or possession of ammunition, call zoning and e-mail them a formal complaint.............. oh wait this is TORT LAW/CONTRACTUAL...........sorry wrong book.


ah hell get an R.O. against them, tell 'em to pack sand, eat poo and die,and to SHUT THE HELL UP! R.O.'s work for everything!


my R.O. is stronger than yer kung-fu!

[mikester]

The contract was for 6 weeks total.

They used 1 week and a few days. Now they want the deposit back. My friend is prepared to work the remaining time they paid for but not really prepared to return the deposit.

Again, these jobs take quite a bit of investment to get and if the client backs out at the last minute my buddy is screwed. The non refundable deposit is designed to prevent this sort of crap.

[stomachmonkey]

In my business we call it a kill fee. 50% of agreed to price is paid up front and is not refundable.

Projects are defined by mutually agreed to milestones. There will always be a milestone that determines final payment. If project is terminated before that milestone then client owes no more money. If cancelled after that milestone is reached then client is on the hook for the balance of the funds.

Like Mike says, some businesses require your full commitment for a specified period of time and once you are into a project you may need to turn down other work to fulfill your obligations to the client.

I wonder how the client would feel if Mike's friend walked off mid project because a better paying gig popped up.

[mikester]

Originally Posted by stomachmonkey

In my business we call it a kill fee. 50% of agreed to price is paid up front and is not refundable.

Projects are defined by mutually agreed to milestones. There will always be a milestone that determines final payment. If project is terminated before that milestone then client owes no more money. If cancelled after that milestone is reached then client is on the hook for the balance of the funds.

Like Mike says, some businesses require your full commitment for a specified period of time and once you are into a project you may need to turn down other work to fulfill your obligations to the client.

I wonder how the client would feel if Mike's friend walked off mid project because a better paying gig popped up.

That's pretty much the deal.

[911Rob]

I'd recommend the client carry out the service with your friend, like he suggests.
If not, then your friend should keep the deposit.
imo

[MotoSook]

There is a written contract stating the deposit is non-refundable. Where's the gray area?