Sorry for the long story, but needed to share some general details.
I started a project with a client to replicate a webapp and an app which they ‘supposedly own’. He had set the project as hourly and I offered him an hourly rate and he agreed with it. We had several phone calls and asked for estimate time required and I gave him lowest and highest time I foresee. We signed NDA and he set a Fixed price milestone based on lowest rate. He also had a set of milestone requirements which he changed along the work. At the end of MS1, he funded for extra hours as bonus. For that we did several revisions to some parts and it was fine as he compensated 80% of hours. Same happened to MS2. Set the fixed price. This time however, it took him 1-2 month and paid 60% of remainder hours and even indicated payment was for extra hours. This time we had requested for 60% to be funded and didn’t forgave the remainder. So you can imagine we had thought of this client as someone who pays for hours when milestone done.
For MS3, after 1.5 month from start of milestone, where I asked for some funding, he went and set a fixed price milestone and released that (he defined a very general: MVP Soft Launch, with email and app versions 1). 2 weeks after that, I informed him according to hourly agreed rate, his payment was 30% for the work done for MS3 and we anticipate an additional 700 hours of work to complete milestone 3.
At this point they started arguing that we set it as fixed price and can’t pay further. A week later they said need to audit the work and evaluate the work so far. We directed them to their servers. However, not all codes were sitting there and some were deploy form of the codes. We told them please send additional funds for the extra hours we worked and we send you all works (40% leftover fund for MS2 and 600 extra hours for MS3).
They started upwork dispute in which they said since you have not completed some parts of MS1 and MS2, and have not shared all codes for MS3, developer breached the contract and therefore, freelancer should refund all funds and send all codes. We shared our part of story and explained why we expect additional funding as they basically amended contract by admitting on text and paying for hours in MS1 and MS2. The client did not agree and we offered a mutual release agreement, however, the client is asking to go to arbitration. It seems like they want all work for free - 6 month worth of work for 3-4 ppl!
This is a client which have called me for the last 6 months and daily instructing what to do daily, including weekends- sometimes 10+ pm. We have several zoom recording and instruction on each page. He tested MS1 and MS2 and agreed on works. During MS3 which was visualizations, he was changing shapes, colors, etc.
Now, my question is what should I do in the arbitration? We trusted the client and even thought of him as a friend. He was 100% happy of the work day before me sharing our concern of costs.
Would you advise on sharing the code and not going to arbitration?
Any advice would be appreciated.
Lessen learned: Never accept work based on verbal trust and work true hourly. Use upwork communication guidelines.
