How do you deal with a client that doesn't pay?
polycounter lvl 3
Hi guys,
Just want to check with all the artist around here, how do you deal with client that has promised to pay but stop replying email and no payment has been made.
At first, we have made agreements via email on the work and the payment to be paid after the completion.
However once I have submitted, not only I didn't get paid, but no respond from the client.
I have a few nice and honest client before so this is my first time to deal with client that went completely missing.
I would love to hear some advice.....thanks a lot!!
Just want to check with all the artist around here, how do you deal with client that has promised to pay but stop replying email and no payment has been made.
At first, we have made agreements via email on the work and the payment to be paid after the completion.
However once I have submitted, not only I didn't get paid, but no respond from the client.
I have a few nice and honest client before so this is my first time to deal with client that went completely missing.
I would love to hear some advice.....thanks a lot!!
Replies
Please do this. If there is no other way you might have to sue the client, in this case getting legal advice might be necessary and it comes with financial risks.
Just a crash course for legal actions - keep in mind it varys from country to country (maybe even from state to state in places like the US).
Basically there are 2 things that will determine what law and jurisdiction are applyable to your case.
1) What court is responsible to handle your case?
There are 2 ways how this can be handled - either you contract has it stated (pretty much every contract used by a company written by a lawyer will have this clause) or the court will check it based on the law (normally at the court where the sued party is settled or alternativly the location where the specific part of the contract had to be done - so for freelancers the specific part would be where they are suposed to do their work and deliver it).
2) What law has to be applied by the court?
There is an United Nation multilateral contract how to handle international cases and each country has its own set of rules when its law can be applied. Also often you will find a term in the contract itself stating which law this contract is based upon. If you lack such a clause in your case then it is up to fall back law provisions to determine it for you. Normally again it will be based on the law where the specific part of the contract was done (for freelancers - where they are uposed to do their work).
See the 'United Nations Convention on Contacts for the International Sale of Goods' for details.
These 2 things also apply when its not an international deal between freelancer and client, they just tend to be less complicated. Still with international deal be aware that the court might have to rule in using an unfamiliar law to itself as well as the lawyers representing you and your opponent!
That's just about the basic formalities. Then there are always additional problems coming up with the part of sueing. There will be most probably legal fees to pay and depending on the law that has to be applied to the case you might not get your full costs back. For example in Austria there is a law determining the costs that a lawyer can demand for every action representing you, BUT these are the MINIMAL costs and you can agree to pay him more (usually they demand a fee per hour, which isn't covered by the law), still the court will rule how much your opponent has to pay you in case of you winning, using the costs as described by the law.
The legal fees also have to be paid in advance most of the times and are based on the value of the legal dispute. So the bigger the sum you are sueing the bigger fees you will have to pay.
If and how much of your legal costs you get recompensated by your opponent is determined on your success in court and is up to the judge to rule.
Finally lets assume you won your case - this just provides you a title for execution. What does this mean? You have now a legal title to base your legal actions to get the money from your debitor if he doesn't pay you. So if the opposing party doesn't meet the rulings results you can go to the next trail demanding the court to take action to secure you whatever the first trail ruled. But here is the problem (and why some island states are paradises for making money disappear) - the court can only go for goods within its jurisdiction. So if your opponent has only bank accounts on some shady island that doesn't recognize your states judgements you might not be able to go after anything at all - or the far more common case - if your opponent is broke, there is anyhow nothing to go for and you will be sitting on your costs until he can pay you.
Last, but not least a piece of advice - never ever confuse laws with what can be proven! You might have done everything right, but you have no proof of it - this could mean you lose or the whole trail get just more complicated and thus more expansive and thus more risky. Always start with a solid fundation. If you are a freelancer or a small company don't shy away from consulting a lawyer to get the basics regulated. You can have them write a basic contract for 99% of your deals (that's actually what all companies do and why we have all those terms & conditions) and just by sticking to the contract and some smart practices like Pigart adviced you won't be burned. If you are doing deals with many smaller companies that are not trustworthy or often in danger of bancrupcy it might be wise to seek offers from legal costs insurances (though be carefull here! I worked for such a company and even if they are not shady, they face very complicated cases so their regulations are hard to understand - often even for lawyers who aren't used to them! - also insurances by definition are gambles - so it might not even make sense for you).
Please keep in mind its nearly a decade ago that I studied this stuff and that laws in your country might differ a lot, so any of this doesn't replace a sound legal advice from a lawyer.
With smaller clients, indies or compagny that do not have much of a reputation and isn't really known, sending your material before getting paid is definitly a risk.
I would highly recommend to always work under a contract detailing information such as, The amount to be paid, when the payment will be due (net 15, net 30) and the way it will be paid. Also adding a close that do NOT lend all the right to the work unless the work as been paid in full as agreed in the contract.
This is a great way to protect you and make sure you and the client are on the same page.
Like I said it's usually not much of a risk with big clients, but with smaller one I usually never send any working files unless the payment has come through.
It makes it so that, at least, if you do not get paid, you get to keep the right over the work that was done and the client doesn't get to use it.
Best deal and security, as mentioned, is get final payment BEFORE full delivery and specify your payment preference at negotiation stage to avoid confusion later.
But sometimes you need to be flexible too. If you're owed...I dunno...a couple thouseand dollars for the final payment...and maybe you already got paid $2-4K previously for milestones during the project...I'd give client some slack for the last payment.
for example:
http://www.olddebts.com/
http://www.alliedcollectionservice.com/debt_collection.php