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Fixed-Price Protection For Clients.

Active Member
Zhao L Member Since: Jun 14, 2016
1 of 10

Hi All,


I hired top rated freelancer in upwork for my partner's urgent project.

This was pretty urgent job, and I hired this freelancer since her profile was shining and she said she can complete the job in-time. Deadline was one week.


But her work was really poor and missed deadline, and she worked NOT more than 30% although 2 weeks had passed.


I ruined my own business for her poor delivery & incomplete work. so, I had no choice but cancelled this job.


Already I paid milestone 1 to her, and remaining money is still in escrow now.


So, I filed a dispute to get my money back from escrow. But freelancer said that I have to pay for her time and effort and she doesn't accept my request for refund for 20 days.


Also, Upwork team said that they can't make judgement against this dispute, and Upwork let us to submit this dispute to AAA (American Arbitration Association) for judgement.


They told me, I and freelancer should pay the fee $291 for this arbitration.

I agreed on it, and we are on the way to this journey now.


Now, I have some questions


1. What guarantee does Upwork provide for clients regarding the fixed contract?


In Upwork article, it is mentioned that, "When you hire for a fixed-price contract, payment is at your discretion, and funds should only be released to the freelancer when you have received the work and are satisfied with it."


Freelancer agreed to finish the job in 1 week when I sent offer to her, but she didn't complete more than half of work to be done, although I gave her 2 weeks.


We missed big events for my partners, I had to cancel the project, and we totally ruined our business.


I didn't receive the promised work, and I didn't get satisfied with her work.

From what Upwork said, I believe I don't have any obligation to pay her.


But I am wasting more than one month to get my money back from escrow. She keeps saying I have to pay for her time & efforts.


I cannot pay any portion of money to her since we canceled the project because of her poor & amateur work.


I'd like to know what Upwork guarantees for clients in this case.


2. What do I have to do and what will happen when AAA is involved for arbitration?


I hired & behaved based on Upwork policy & rules of games, and now I can't expect the judgement from Upwork.


I have to invest another one month talking with AAA, paying $291 fee for this.


Do I get this $291 fee back if I win the dispute in AAA? If not, I still don't understand why I have to pay this fee to get my money back, although I followed Upwork rule. And, what steps do I have to follow and what kind of unexpected things might happen when we talk with AAA?


I am very new to this, and I am wondering if AAA recognizes Upwork and its rules of "games". If anybody has experience in this, any suggestion or advise would be really appreciated.


Thank you.

Community Guru
Preston H Member Since: Nov 24, 2014
2 of 10

If you had an important, tight deadline, why didn't you hire more than one freelancer?


I am sorry you had a bad experience with a freelancer, but what you did in relying on a single individual makes no sense.


Using disputes is not a proper way to conduct business.


Hire multiple people to do the work and continue working with the ones whose work you love.

Community Guru
Preston H Member Since: Nov 24, 2014
3 of 10

Zhao, the contractor you hired was very unprofessional. She should recognize that she made a mistake and she should NOT have disputed your attempt to recover the money in escrow. If the arbitration process finishes, you should win a Pyrrhic victory.


For future reference: plan never to use disputes or the arbitration process. It is a time sink, aggravating, and it is not how successful clients conduct their business.


In your situation, you should have hired three quality contractors using hour contracts.


You would have seen that this particular contractor was slow to turn in work, and the work was low quality. You would have closed the contract immediately.


Of the other two, one would have turned quality work within 4 days. The project would then be done to your satisfaction. The third contractor was doing quality work, but had only billed a couple hours by then.


You close the contracts on both of them thanking them for their work and giving them good reviews.


You would have spent roughly the same amount of money, maybe a little more overall, then you would have paid if the fixed-price with one contractor gambit had succeeded. But this would definitely have been better than how things worked out for you.


The contractor you hired was a terrible fit for your project,

There was no way to know that ahead of time.

It was a tactical mistake to use a fixed-price contract with one contractor when you had such an important project with such a tight deadline.

Active Member
Zhao L Member Since: Jun 14, 2016
4 of 10

Hi Preston,


Thank you for your quick reply. I really appreciate it.


To be honest, I hired another freelancer as well, but he was not good fit too. It was really pain to find good freelancer. They were all having Top Rated badge though.


And, if I hire those freelancers as hourly basis, I am wondering if I have to pay the hours even they work really slow?


I totally agree on your point that dispute is time consuming.

I want to know what Upwork guarantees for hourly contract & fixed contract.

If we clients have to pay for such unprofessional freelancers' hours, who pays clients for the wasted time?


And, I would be very happy if you tell me more about AAA.

How long does it usually take to solve the dispute, and what kind of challenges I might face?


Thank you again.

Community Guru
Preston H Member Since: Nov 24, 2014
5 of 10

re: "And, if I hire those freelancers as hourly basis, I am wondering if I have to pay the hours even they work really slow?"


You would have to pay for any work done by hourly contract freelancers.


But it is VERY EASY to get out of the contract. You just close the contract. There is no escrow. There is no lump sum payment to fight over.


If you close the contract, there's nothing they can do about it. They can no longer log time and bill you.


So you could try out a number of people... Set their maximum number of hours to just 1 hour if you want to. And if you don't like their quality of work or how fast they work, then just close their contracts. There would be no disputes or anything.


You can hire a few people and have your project manager evaluate their work after just an hour or two, and then continue working with only the best.

Community Guru
Preston H Member Since: Nov 24, 2014
6 of 10

re: "I want to know what Upwork guarantees for hourly contract & fixed contract."


If you have a contractor working on an hourly contract, and their activity level is really low (meaning they're not actually typing or clicking the mouse or doing anying, but just running the clock), then you can dispute the low-activity hours, and Upwork will reverse the charges for those hours.


If you have a contractor whose work diary shows they're not working on your project, but are surfing Facebook or something, then you can dispute those hours, and Upwork will reverse them, and you won't be charged for them.


This isn't the same kind of "dispute" that you're currently going through. This is something you can do through Upwork Customer Service without having to go to arbitration or anything.


Fixed-price contracts:

Upwork doesn't guarantee a whole lot. It lets YOU decide whether or not to release payment, and you can change the amount of the payment. But if the contractor is a jerk about this, it is possible for the contractor to dispute your decision, which is what happened to you.


For the most part, fixed-price contracts are very safe for clients to engage in. Most contractors won't do what your dishonest contractor did. But it is possible for this to happen: for a contractor who is clearly in the wrong to dispute your decision to not pay or to pay less than the originally agreed-upon amount because they didn't complete the job.


So for fixed-price contracts, what you need to do is to start with small pieces of an overall project... just an hour or two of work, maybe less than $100 of pay, and see if you actually get good results from the contractor. If the contractor delivers work you really like, then you continue working with the contractor, using successively larger contracts.



Upwork DOES NOT GUARANTEE the quality or usability of work produced with an hourly contract OR a fixed-price contract.


With an hourly contract, you're paying for a contractor's time.

With a fixed-price contract, you're paying for a deliverable.


But Upwork is NOT going to evaluate the work delivered, either way.

Active Member
Zhao L Member Since: Jun 14, 2016
7 of 10

Thank you Peterson,


My mistake was, I should have closed the contract when I pay milestone 1.

Milestone 1 was to do small task.

She missed the deadline for milestone 1 and quality was not good, but funded the whole budget with the hope that things could go faster.


Thank you for your help

Community Guru
Preston H Member Since: Nov 24, 2014
8 of 10

A client should keep in mind that she doesn't owe a contractor any continuing work.


Pay for the work done.


But you never need to keep a contractor around if their work isn't what you want.

Ace Contributor
justin c Member Since: Jun 17, 2016
9 of 10

I'm really curious to know why Upwork can't get involved in the dispute. Isn't that their job?

Community Guru
Petra R Member Since: Aug 3, 2011
10 of 10

@justin c wrote:

I'm really curious to know why Upwork can't get involved in the dispute. Isn't that their job?

 They DO get involved in the dispute (and do decide on hourly contracts) but can not make a binding decision in fixed rate cases because those are governed by complex Escrow legalities and that means they can only be decided by independent 3rd party arbitration which is very expensive.