Re: Deposits, refundable or non?

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Christina:

It seems to me that you have a contract and the client is
liable on the contract. From a legal point of view, you
should place the money in an escrow account until you can
resolve the matter. It depends on how the contract is
drafted. It sounds like you have a good claim. It sounds
like you may have a right to keep the money. Go to court if
necessary.

From a business & practical point of view, you should contact
this client & inform them that they signed a contract for
$2,500. That you missed out on a opportunity & lost money
due to them signing this client. See if you can talk them
into you keeping the $2,500. I would put the letter in
writing. If necessary, negotiate to keep a portion of $2,500
& reduce it to half the bill ($1,250). Tell the client, lets
make a deal. I keep $1,250 dollars & you get $1,250. Then,
you have a happier client & you still do not get totally
screwed. Neither one of you has to obtain counsel & it is
over. Plus, you don't have a pissed off client telling other
people about you. If this client could really hurt you from
a business point of view, make this client happy almost at
any cost. It may be the cost of doing business. In the
future, you probably want to make up front money as a
retainer (not a deposit).
> Ok, ya'll are goin to want to smack me before the night is
> out,
>
> I have recently found myself in a sticky situation, and am
> very unclear on quite a few things, here's the situation.
>
> I have a client, who has been a repeat client for the last
> year..he has spent about 4,000$ with our company in the
> last 6 months. This client is a realtor, who has a number
> of different websites, that we created for him.
>
> He (dumb dumb dum of him to do) referred a competitor of
> his, to see me about a website. Not sure if he actually
> refered or not, i contacted him to see if he would mind if
> i took the project, and assured him that they weren't
> going for the same market area, bla bla bla , my existing
> client said "Sure no problem, do i get a discount for
> referring?"
>
> So we took on the new project, our existing client calls
> me on Monday, and says "Hey I need you to do me another
> website for Undisclosed Community, so i said sure, but we
> do have a waiting list right now, you'll have to put a
> deposit down bla bla, he said noo nooo i dont want to do
> that, I'll wait til theres no list, I have time.. same day
> the refered client calls with a descision on what to do
> with their website, they want to build a community website
> for that same Undisclosed Community, (jeez what a pain).
> Because the existing client had already mentioned it, i
> went to him to give him another chance, explaining that if
> he doesn't put deposit, or contract us at the last, to do
> this job, that I was going to have to take it as a first
> come first serve basis, the new client was ready willing
> and able to put deposit and sign contract.
>
> Existing client puts down deposit, signs contract three
> minutes later, i called new client and let them know that
> I would not be able to do it, beucase i was already under
> conract for it, that they'd have to pick another community
> to go with (they had narrowed it down to three). They
> picked another, with a much simpler design then the
> original, which was quoted at 2500 more then the one they
> went with.
>
> 2 1/2 months later, the existing client is short on money,
> wants his money back, and is furious that i won't refund
> it.
>
> My standpoint (i think) is that I signed contract with
> others, on a tight schedule, the two weeks planned to do
> his website, are now "open" becuase no other clients on
> the waiting list are ready to proceed with their website,
> they were all expecting more time to gather information
> for their sites. It looks like I'm going to be taking a
> mini vacation from work for the next two weeks because he
> contracted me for these two weeks, but he now wants his
> money back.
>
> What do I do? Legally are deposits known to be
> refundablel, or non refundable? Or is there even such a
> thing as a 'known rule' on deposits.
>
> Legally do I have to refund his money and have that result
> in lost project from the new clients?
>
> Any advice would be great, even if you wanna laugh at how
> stupid this all must sound :)
>
> Christina
> VERY happy that the two weeks is over tomorrow :) :)

Re: Deposits, refundable or non?, 12/22/03, by sean.

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