Over at Secret Lab, we’ve been dealing with a client who won’t pay. Since October last year, we’ve been working on a gorgeous iPad application for a big name client who has been nothing but full of praise for our (quite frankly, amazingly good) work. They have literally sent emails thanking us and telling us how great the work has been.
Per our standard terms, we don’t turn over source code and ownership of source code until the final payment. They accepted this, in writing, up front. It’s pretty standard stuff.
The client has been hard to pin down, and has declared how busy they are are travelling the world (join the club, we travel all the time and respond instantly) and generally being very important, by way of explanation to their lack of responsiveness (not our problem, but whatever). They have also disappeared or been unreachable for large periods after the app shipped to the App Store and went live.
There was some squabbling by the client over this (I imagine they probably didn’t read what they agree to, pretty standard stuff — we suspected they hadn’t read the terms when we started getting emails complaining that we were over budget. We were not over budget by a single cent), and when they refused to pay until they received the source code we renegotiated (after offering escrow, and a few other options), and arrived upon: they’d pay 50% of the remaining owing, we’d send the code, they’d immediately send the other 50% payment.
They paid the first 50% (late, I might add) and we immediately (literally, immediately) sent the code along. They have yet to pay the other 50%.
Now, months after the app shipped (literally months after the client shipped the app to the App Store and is collecting the IAP revenue), and weeks after they were meant to pay the second 50%, they have declared that it is ‘terrible’ and ‘horribly broken’, and are refusing to pay until they fix it. (I say they fix it, because while we’ve offered — even though we’re definitely not obligated to — they haven’t given us a bug report.)
It’s at this point I should add: after shipping the first release to the App Store, the client activated an optional final milestone in our agreement for us to perform some additional work on any bugs discovered since launch. All were minor, and largely cosmetic (the client supplied the list), and we shipped that build off to them. They have yet to set it live, and if there was a ‘terrible’, ‘horribly broken’ issue with the first version that shipped we’d have expected them to include that on the list of things to fix for that milestone (and if they were so unhappy with us why did they activate that milestone?)
Despite the client disappearing for a number of weeks in between the app shipping and them turning up and declaring it broken we, of course, offered to take a look into the issue they were seeing.
No bug report was forthcoming and the client went back to ignoring us. So we got our lawyer involved, and the client responded with a video showing the app not working to our lawyer. They didn’t supply a bug report, or credentials that result in the broken experience the video showed. Nothing useful, just a video. (We can’t reproduce the issue, but aren’t accusing them of lying; software is software. Software has bugs. While they had ample opportunity to report such a bug, and while we’re no longer really obligated to look into it, we would, because we like our clients. We just need an actual bug report, not a video, and not emails ranting about how everything is broken without providing context or requested information).
We’re owed nearly $50,000 AUD, and are very very out of pocket. The client throws around such comments as “it’s not that much money”, and “money is not the problem” but doesn’t take us up on our very generous offer to take a look into their issues regardless (and, indeed, only sent a video when our lawyer got involved. The video isn’t helpful to actually investigate the problem.)
We’re now in the position of having to take what seemed like a dream client to court for an amount of money that, while not very much in the scheme of things, makes a big difference to a small business that’s very selective with who it takes as a client.
Suffice to say, it hurts us, big time, and makes the difference between being able to go to a conference where we might find more work, and having to stay home. Or, you know, fund the popular open source project we work on.
I guess that we’re lucky that we’ve never had to really deal with this before in our nearly 12 years of existence.
Recommendations welcome. My email is email@example.com ❤️