What happens when a client DOESN’T respond? You’re ready to do your part. They’ve even paid you but they haven’t given you what you need to complete the deal.
It’s frustrating because you’re not sure where you stand legally. Can you keep any deposit or money paid? You can’t wait forever for them to cooperate.
What Does Your Contract Say?
The business relationship is defined by the contract. Everything else is just talk. The contract with your client is the road map and foundation of your relationship. So you should start there.
Look at your contract. Does it have a refund clause? Are you allowed to keep payments or deposits in certain circumstances?
The refund clause may state that there are no refunds for deposits or payments made for work already completed. Which would be good news to you. Or it may allow refunds of a certain percentage within a specific time period. There are many possibilities so check this provision to see if and when you are required to return funds.
Also understand that although the contract may state no refunds for deposits, if you haven’t completed any of the work they may argue that they should get their money back despite what the contract says. You would have to decide whether it is worth fighting that battle.
You’ll also want to check the termination clause. If you cannot hold up your end of the bargain and the deal is going nowhere fast, see whether you have an out and how much written notice is needed. The termination clause may require a certain number of written days notice. And depending on the contract, you may not need a specific reason to cancel.
Because of the many clauses at play, it will depend on what your particular agreement states. Use it to guide you in your decision of how to approach the client and of course seek the help of an attorney in your jurisdiction if you need assistance.
Always Use a Well Drafted Contract
It’s important to not only have a contract when doing business but it should also be a well-drafted one that covers the subtle nuisances that go can unnoticed until there is a problem.
If your contract is too simple and just states that you will provide services for a client for a certain amount and everything else is boiler plate language, then that’s not helpful if a problem arises.
A contract cannot prevent every legal situation out there but a solidly drafted one can guide you when common business issues like this come up.
Need a Solid Contract Template?
Visit my online contract template store, Legal Goodness, where I have all types of agreements for different industries. And if you don’t see something, let me know. I’m always adding new contract templates to the store.
If you’re looking for a contract bundle, check out Legally Good Club which is my collection of contract templates, website terms, disclaimers, informational legal videos, checklists and more! Watch my online training, Business Legal Made Simple to learn more.
This blog posting is provided for general informational and educational purposes only and is not provided for specific, individual legal advice.