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Not paying fixed-rate contract - Particular Case

Active Member
Simone B Member Since: Oct 26, 2019
11 of 24

So that he does not making fun of me. Because this is how I feel now. In a trap.

Community Guru
Will L Member Since: Jul 9, 2015
12 of 24

Simone,

 

Under Upwork's rules, as I understand them, within a certain time period you can submit a refund request for some or all money you have paid out to a freelancer or used to fund escrow under a fixed price contract.

 

If the freelancer doesn't agree to the refund, you can use Upwork's mediation services to try to reach a mutually-acceptable agreement with the freelancer. Whether or not you use Upwork's mediation services, you can at any time tell Upwork to send the dispute to arbitration.

 

Requesting arbitration will require you to agree to pay $291,but only if the freelancer also agrees to pay $291 to an arbitrator. If the freelancer doesn't pay $291, you will not be charged $291 and will win your dispute by default, meaning the refund you have requested will be made by Upwork.

 

If you do pay the $291 for arbitration and arbitration occurs, that money will not be refunded to you regardless the outcome of the arbitration.

 

Good luck.

Community Guru
Petra R Member Since: Aug 3, 2011
13 of 24

Will L wrote:

 

Whether or not you use Upwork's mediation services, you can at any time tell Upwork to send the dispute to arbitration.


Only if dispute mediation fails. If the client does not participate in the mediation procedure, the freelancer gets the money in Escrow.

 

Community Guru
Will L Member Since: Jul 9, 2015
14 of 24

Petra,

 

Who decides if Upwork mediation has "failed"?

 

As a freelancer, if I had a dispute with an unscrupulous client and the amount of payment in question were large enough, I'd just as soon tell Upwork I'm not interested in any "mediation" and request they send the dispute to arbitration immediately.

Community Guru
Petra R Member Since: Aug 3, 2011
15 of 24

Will L wrote:

 

Who decides if Upwork mediation has "failed"?


It would be considered "failed" when the non-binding suggestion made by the mediator (after both parties have stated their cases and showed what was delivered) is not accepted by both parties. Only then may the process move towards arbitration.

 

Considering Upwork has to pay $ 291 to go to arbitration too, they have the right to try and resolve it amicably first.

 


Will L wrote:

As a freelancer, if I had a dispute with an unscrupulous client and the amount of payment in question were large enough, I'd just as soon tell Upwork I'm not interested in any "mediation" and request they send the dispute to arbitration immediately.


Yes, I would too, but it's a necessary first step.

Community Guru
Will L Member Since: Jul 9, 2015
16 of 24

I see. Upwork certainly has an interest in avoiding that $291 cost, too.

 

So I could request arbitration immediately, but Upwork has to approve the request at its sole discretion?

 

Yet another reason not to do fixed-price contracts. 

Community Guru
Petra R Member Since: Aug 3, 2011
17 of 24

Will L wrote:

I see. Upwork certainly has an interest in avoiding that $291 cost, too.

 

So I could request arbitration immediately, but Upwork has to approve the request at its sole discretion?


I believe what Jenn says she does is state clearly from the outset what she is willing to accept and if she doesn't get that, she will opt for arbitration. You still have to do all the boring stuff such as state your case and show the deliverables and so on.

 


Will L wrote:

Yet another reason not to do fixed-price contracts. 


I wouldn't say that (for me personally), I only had one dispute in all the years and over 250 contracts (most fixed price) - and that would have been avoided had I listened to my gut and declined the contract... The dispute was a most unpleasant experience (I guess they have an interest in not making it pleasant, as a deterrent...) but I ultimately walked away irritated but with all my money in my grubby little hands.

 

Had it been necessary, I'd certainly have gone to arbitration. I had the money set aside in case the client would not fold.

 

Community Guru
Will L Member Since: Jul 9, 2015
18 of 24

As I said before, the arbitration option is not feasible/attractive to freelancers on low-cost (sub-$291?) projects. I have the luxury of not working on such projects, so I would either agree to a client's reasonable request for a refund (without getting Upwork involved in any way) or request arbitration immediately and go through the motions with "mediation." I have no obligation to negotiate anything with lying/cheating/clueless clients, of which I have dealt with blessedly very few.

 

But I suppose all of this makes it a good idea to close a fixed-price contract when the project is complete, in order to start the 30-day countdown on the client's ability to request a refund that will, ultimately, automatically be paid by Upwork if the freelancer doesn't agree to change their refund request or pay $291 for arbitration?

 

Another contract could be opened if more work needs to be done.

Community Guru
Jennifer M Member Since: May 17, 2015
19 of 24

Will L wrote:

I see. Upwork certainly has an interest in avoiding that $291 cost, too.

 

So I could request arbitration immediately, but Upwork has to approve the request at its sole discretion?

 

Yet another reason not to do fixed-price contracts. 


If you tell the mediator that you want a certain amount or you want arbitration, they will go back to the client and try to get some amount and come back to you and acknowledge that you're willing to go into arbitration. They might ask if you'd consider some kind of remedy (like revisions if you're a writer) and if you say no to that, then they will ask you to pay the arbitration fee.

Moderator
Vladimir G Moderator Member Since: Oct 31, 2014
20 of 24

Will L wrote:

 

So I could request arbitration immediately, but Upwork has to approve the request at its sole discretion?

 

Yet another reason not to do fixed-price contracts. 


Hi Will,

 

I'd like to clarify that this isn't an accurate representation of Upwork's role in the mediation process, since contractual parties are the ones who decide whether to proceed to arbitration or not. Petra was describing the outcome in case one party doesn't respond to the dispute request in the allotted time frame, in which case the funds are awarded to the participating party in line with Upwork ToS.

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