Client disputes work done by my freelance partner - wants refund

Without getting too complex with respect to the issue at hand, I wonder if anyone here has ever had a client dispute work completed and attempt to get a refund through PayPal?

In short, I freelance with a developer - ex spouse but still very close friend - who took on a project and ended up going through a hellish experience, which I think is partially his own fault, but also because he came to find he was working with a less than desirable, (unrealistic project expectations) unpleasant and rather demanding client.

Anyway, he and the client ended up having considerable differences which resulted in the client wanting to refund money paid via PayPal for work done starting from months ago.

We just freelance part time together somewhat unofficially at the moment, our PayPal account is a business one, linked only to my - yes, my - bank. We trust one another and so never had a problem doing it this way. Also, it was previously linked only to his.

I can be more detailed, but for the moment, I was wondering if anyone has experienced similar - re: having had a client dispute and attempt to refund money paid on work done and agreed upon upfront payment -what was your experience and what was the outcome of the dispute?

What is specified in your contract regarding payment for work complete?
What is your contract with your partner regarding money deposited to the paypal account?
Not really any of my business in detail, more to the question, do you have any kind of legal, binding and signed contract with both parties?

We aren’t lawyers and whatever experience anyone here may have had may not relate to your situation, in your state and/or country of residence.

Might want to visit with a contract lawyer in this.
If the cost of the lawyer is more than the return of payment, that may answer your question right there.

Another point, if you are in business, you are in business, part time or otherwise. You may want to investigate separating your personal assets from anything related to said business. If you are a “sole proprietor” instead of a more protected LLC or similar, you open your personal assets to business legal matters. Proceed very carefully.

Thanks,

The contract was simply in the form of a PayPal invoice listing all the work expected

The dispute is through PayPal resolution center

No pre-work contract delineating work to be produced, with due dates, deliverables due on those dates and payment expected on those dates? No “kill” clause? Nothing signed by the client agreeing to pay for work completed or that payment for work implies acceptance of the work?

First off, I agree with what PrintDriver said. There’s no way anyone here can sort through this.

I use PayPal for various things, but never to receive payment from clients. I don’t need the hassle of a third party’s arbitration clauses muddying the water on a contract between me and a client.

In all my years of freelancing, I’ve only had one instance of a client disputing payment over something. He was unhappy that the texture of his engraved logo on his business cards didn’t match the texture of his offset printed name and address. When I explained that the whole point of an engraved logo was to look and feel different from offset, he claimed I was making excuses and wanted his money back.

Fortunately, my contract with him would have forced him to travel from Tennessee to Utah to pursue a legal dispute that he would have likely lost anyway. He never pursued it beyond making threats.

Contracts and all the various legalities associated with running a freelance business are a huge hassle, and 99 percent of the time they’re overkill and unneeded. But that 1 percent of the time when things take a turn for the worse, it’s essential that everything has been spelled out clearly and unambiguously in writing ahead of time.

Also, again agreeing with PrintDriver, you absolutely should not have your finances tied up in an informal arrangement with someone else. Whether you trust them or not is irrelevant. Things happen and when they do, your fault or not, you’ll get pulled in.

The same holds true with your bank account. For reasons already mentioned, it’s important to separate your freelance work from your personal life by doing business through an LLC (I’m assuming you’re in the U.S.) and using a separate business bank account tied to that LLC. In the unfortunate event of something really going wrong and a court deciding against you, the LLC and its assets will be the only thing at risk. Otherwise, most everything you own could be dragged into the legal disaster.

The client was apparently pleasant in the beginning but progressively became unreasonable and demanding. My partner actually worked on a separate project with him initially, and that went along fine, so he didn’t anticipate all of this.

I guess my partner didn’t just walk away after the client started to change his tune, because he needed the work but also because he felt bad about just leaving the client with a big mess that he wouldn’t know how to clean up. And with his client dealing with his mother being ill and close to dying, he felt sympathetic to that, as well.

He didn’t walk away but should have. He also should have set more clear terms of work and payment, obviously in the form of a contract or at least more clearly laid out via the Paypal invoice.

We’ve just never had to deal with anyone like this before. Ever. Hands down, the worst client I’ve ever seen any of us work with before.

No, nothing was signed, but there were itemized tasks with deadlines listed on one invoice sent by the client months ago . The payment terms were mentioned there, also, I believe.

The main aspects of all work were agreed to by both parties and all of that work was completed. Even the extra things sneaked in by the client were done and my partner said something indirect about that after it became a recurring issue, but the client always had some way of twisting it around to make it seem like it was somehow part of the bigger picture or not a big deal. Due to the client having full control of putting in most changes, he repeatedly made errors and messed up certain aspects of what had been done, yet he didn’t seem to have the ability to understand this, instead holding my partner responsible for anything that went wrong. These extra tasks were never previously discussed over the phone or included in his tasks listed on the invoice. A few times he asked my partner to do things that were more along the lines of design rather than coding as well. I actually helped on occasion with those things

The deadlines set were agreed to by both parties but not met on account of some of the following things, from what I understand:

  1. The client had to take somewhat unexpected hiatuses from the project - lasting anywhere from a day to a few days in a row -due to the failing health of his mother, who was afflicted with a serious, life-threatening health condition. This was most significant where my partner was never given full access to the whole site and had to pass changes plus instructions on “how to” (input the changes into his CMS) over to the client so he could input everything himself.

  2. On more than one occasion, the client misunderstood instructions and made some mistakes which screwed up his site in one way or another that my partner would subsequently have to go back to correct or explain “how to” all over again to the client. In a few of these instances, the client felt that it was my partner’s fault and not his and placed full responsibility with my partner for any errors. From my perspective, my partner tried to be very clear and work with his client to resolve anything that occurred, even though he knew it wasn’t because of anything he’d done. He had to, otherwise the client would be left with a mess he didn’t know how to clean up and he didn’t want to do that.

  3. My partner never had full access to the site and so, the way in which he worked with his client to fulfill project goals was not time efficient.

The client’s mother took a turn for the worse and the project was put on hold until he finally wrote back, a couple months later to say that his mother was doing much better and that he wanted to resume everything.

And at that point, all work was nearly completed, except for a few small details and also save for one task which required full access that the client didn’t want to grant so finally decided that he’d just take care of himself and he clearly stated this to my partner.

When he contacted my partner again, he wanted to finish up the smaller items and also had new things that he wanted to address. They spoke by phone about this and then in an e-mail, the client summarized their conversation but added in some extra things, once again, that they had not discussed over the phone. He also did not want to pay my partners weekly rate this time, only half of it upfront. My partner agreed to do part of the work for half rate, but informed the client that he’d have to pay the rest of it if he wanted him to do everything that they had talked about over the phone and also the new things listed in the e-mail. By this point, the client had also done something to the back-end of his site which created new problems and this was another request that he wanted assistance with. He wasn’t upfront about that with my partner, though. My partner just got very tired of dealing with him and so refused to budge unless the client agreed to pay what my partner felt was reasonable.

This is when the client really lost it, got mad and kept insisting on his terms of payment. He has also threatened to come after my partner and even me, as he knows I work alongside of him. I’m not taking that too seriously but it’s in the back of my mind at the same time.

I will be un-linking my bank account from Paypal thanks to this but not because I don’t trust my partner. The only thing he should have done differently is where the contract is concerned. He should have made out a clear contract setting all terms of work and payment. Since this is the first time this happened, at the first signs of this client giving trouble, I didn’t take it too seriously, nor did my partner. He was very patient with this client, all throughout his all caps e-mail correspondence and lengthy phone calls about the project. He just wasn’t that bad in the beginning, as I mentioned.

Honestly, though, this turned out to be the client from hell and I am not sure if writing out a contract would have prevented this. I believe he still would have found a way to be dissatisfied.

I understand that as of a year or two ago, I think, Paypal now considers digital services under intangible goods/services to be eligible for buyer protection, yet I don’t think, although it’s a bit early to say for sure, that this client has much of a case to win this dispute, which he’s now escalated.

We’ll see what happens. We’re trying to take it one step at a time. We’ve responded to his claims and now Paypal will have the final say.

I’ve learned some lessons, certainly.

I was just hoping that anyone here may have gone through similar and could share their account. Thought that might help us know what can be done and what the chances of the dispute being ruled in our favor may be.

That’s a lot to digest and it sounds like a real mess.

I don’t think a contract could have prevented this person from being dissatisfied. He was obviously having some difficult issues of his own he was dealing with.

Even so, a good contract covers things like this because it includes various means to end unsatisfactory relationships. With new clients and depending on the scope of the project and the client, I will sometimes break the work up into phases spelled out in detail in the contract. Each needs to be completed, signed off and paid for separately before moving on to the next phase. This provides each of us the ability to end the relationship at the completion of each phase. At the very worst, I would refund the deposit for the current phase and terminate the whole thing.

I’ve never actually had to do that, though, but in the case you just outlined, I’m pretty sure I wouldn’t have stuck with it.

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Yes. I probably could have summarized things a little better, but it is a bit of a mess.

We’re trying to just stay calm about it all.

As I’ve said, I have learned some lessons, as has my partner.

He has had some personal issues that may have affected his character and performance in his daily life, I’ll give him that. I can certainly relate. My mother was ill last year, too, but she didn’t recover and passed away a few months ago.

However, it wasn’t until after his mother was no longer near death that he really freaked out. I would have thought that her health having improved would have restored at least some of his stress and anxiety…

Trying to think positive. Either way, that client, unless he’s willing to be more reasonable, which is unlikely, and come to some other sort of agreement or compromise, is not getting money back for work that was completed.

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