[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.