Client gave me incorrect instruction - fixed price project

[#1]

Hi all,

I would like to understand my position on a matter. I have this one time, fixed priced project involving the redesign of labels.

Before accepting the job, I discussed various considerations with the client. I advised her to first understand the legislation related to imports and exports as well as the limitations regarding font size. Because if the requirements were impossible to meet, I would not be able to fulfil the task.

She assured me that my concerns were unfounded and that her client "simply wanted XYZ to be done." She also mentioned that the font size was not an issue, as long as all the necessary information fit on the label.

I then provided a mock-up (and requested payment for it), during which time no comments were made about the font size.

Therefore, I proceeded to complete the rest of the project based on that mock-up.

A few days later, the client returned with feedback, stating that the font size needed to be larger than 2mm. Had this been specified at any stage, I would have declined the job, as it is simply unfeasible.

Where do I stand now? While I am open to making as many revisions as needed, the client's request is logistically impossible. Moreover, I have already invested a considerable amount of time in this project due to their urgent turnaround time request.

There are still 2/3 of the fund that is holding in escrow. 

Would appreciate any advice. Thank you.

[#2 · Accepted solution]

If the client already released 1/3 of the total value of the job for payment to you, just tell her you cannot complete the project based on her new font size requirements. (Refer her to your previous warnings in this respect.) Agree to allow Upwork to revert to her the remaining funds in escrow and wish her well in finding another freelancer.

Do not agree to refund any money already released to you. She should appreciate that you are not requiring a higher amount of payment from her, considering how much time you've already spent on this job. If she does, she might give you a positive JSS rating (or not).

But don't let the possibility of a negative rating from this client lead you to refunding what you've already been paid. Although a full refund would remove the public rating/comments the client provides you on this project, it would have no effect on the much more important private rating the client can leave for you.

Good luck!

[#3]

Thank you. I appreciate your input. 
Unfortunately, the job has been done after they agreed to the first mock up.

They are four identical labels with slight variations with the ingredients, so as long as the first they ageeed to the first, there should not be issues with others. 

I have pushed her to release funds and we should reqote for a other proposal. 

and I have involved upwrok support as well...