Client wants to cancel project midway

[brian-giles]

Hello! I'm having my first issue with a client on a fixed-price project.

My client has decided they no longer need the project completed due to unrelated reasons to me after a lot of work has been done on it. They told me they wanted to settle on an amount since the project was never completed but some work had been done. I agreed to this and informed of a fair amount. Instead, they replied back offering 1/5 of the total contract amount as payment. Of course, I found this unreasonable.

After exhausting communication the client is unwilling to settle at a fair amount and has started to personally bash me and my qualifications (this is the 3rd time working with them, so they're clearly just trying to annoy me and spare their losses by taking back the money from the contract). I cannot propose a new milestone with the settlement amount I proposed because the client is unwilling to pay.

The contract is still showing as active and I don't know how to proceed, since they won't do anything about it. Should I send the work in and request payment for the full amount even though the project wasn't fully completed? Can Upwork intervene now and mediate?

Thank you in advance!

[prestonhunter · Accepted solution]

re: "Client wants to cancel project midway"

There is nothing wrong with that.

An Upwork client may cancel a contract at any time. For any reason.

A freelancer may cancel a contract at any time. For any reason.

This is fine.

If a client has hired a freelancer with a fixed-price contract, and the client wants to cancel the contract, all he needs to do is release any remaining escrow money to the freelancer and close the contract.

No rules have been broken.

Nothing unethical has been done.

And there is nothing that the freelancer can do to block this action.

re: "My client has decided they no longer need the project completed due to unrelated reasons to me after a lot of work has been done on it. They told me they wanted to settle on an amount since the project was never completed but some work had been done. I agreed to this and informed of a fair amount. Instead, they replied back offering 1/5 of the total contract amount as payment. Of course, I found this unreasonable."

That is not okay.

It's not really up to the client.

It is up to the freelancer.

If the client wants to END a contract and release all escrow money to you, that is fine.

If the client wants to end a contract and get some money back, then the client needs to ask you how much refund you are willing to give him. And you tell him. And he accepts that.

A client can't end a fixed-price contract and tell YOU (the freelancer) how much money he is willing to release to you.

That is NOT okay. It is not ethical.

And the Upwork user interface doesn't allow for that.

The client HAS NO BUTTON to unilaterally get escrow money back without agreement from the freelancer.

re: "Instead, they replied back offering 1/5 of the total contract amount as payment. Of course, I found this unreasonable."

The "total contract amount" is meaningless. Ignore that.

The only thing that matters is the money in escrow.

If there was a current escrow task for $100, and you have done half of the work, then you should inform the client that you have done half of the work, and that half of $100 is $50. Therefore, the client needs to release $50.

If the total contract amount (or total "budget") is $1000, and the first milestone was for $100... And you have completed half of the first milestone, then the amount the client should pay you is $50.

re: "Should I send the work in and request payment for the full amount even though the project wasn't fully completed?"

It doesn't matter if the project is completed or not. That is irrelevent. What matters is the MILESTONE TASK.

If there is a specific milestone task, funded for $100, and you have completed 50% of that task, then you should use the "Submit work for payment" button, but you should edit the amount to be 50% of the total amount in escrow.

re: "Can Upwork intervene now and mediate?"

It is Upwork's intention that freelancers and clients work things out between themselves.

You really should try to do that.

But if you absolutely can not come to an agreement with the client, then you may file a dispute:

https://support.upwork.com/hc/en-us/articles/211068528-Dispute-Non-Release-of-a-Milestone-Payment

[brian-giles]

Thank you for your swift reply Preston. The client is taunting me saying they want to cancel the contract but won't actually go through with it (request to end) unless I settle for the amount they want. So the project is just sitting there as active even though I am no longer working on it. That's why I don't know how yo proceed, is there a way I could start the closing process without losing the payment? 

EDIT: I didn't see the whole message, thank you Preston what you replied is very clear now that I saw all the message. Thank you for your guidance!

[prestonhunter]

re: "is there a way I could start the closing process without losing the payment?"

You don't need to close the contract.

https://support.upwork.com/hc/en-us/articles/211068528-Dispute-Non-Release-of-a-Milestone-Payment

I really am sorry that you are facing this.

The client's behavior is inexcusable.

[brian-giles]

Thank you Preston once again for providing me with this link. Indeed it is very unfortunate, all my previous Upwork working relationships have been successfull so this situation is certainly catching me off guard. Thank you for your assistance once again!

[gilbert-phyllis]

If there is an active, funded milestone, then request payment in the amount you think is fair for the amount of work done--assuming there is enough money in escrow to cover that amount. If you have done more work than can be covered by funds in escrow, that was a mistake. You should never work ahead of funded milestones.

If there is not an active, funded milestone, you will be lucky to get paid any amount and should probably take whatever the client is willing to pay.

If you and the client cannot reach a mutual agreement, you can request mediation and an UW mediator will simply referee discussions and encourage the two of you to negotiate an agreement. If that fails, then either of you can request arbitration and pay the $291 arbitration fee. If the other party also  pays $291, then UW will also pay $291 and the arbitrator's decision will be binding. Obviously, that only makes sense if the amount of money on the table exceeds $291. 

[brian-giles]

Hi Phyllis, thank you for your insight! Thanks for replying to the post in such short time.

[tagrendy]

Unless you're willing to go to arbitration, there is no way to get the full amount. If you start arbitration and win it, you will get money in Escrow - $291. If you start arbitration and Client backs out, you get money in Escrow.

But if you're not willing to go arbitration the client will get a full refund regardless who is wrong or right. 

Keep in mind he will also leave a horrible feedback.

So, weigh in your chances. Is the client likely to back out? Can you risk $291? Do you have a perk to remove the bad feedback he will leave?

I personally would try to negotiate price they offer but not to the point where relationship is ruined. Especially if this is a client you worked with before, I'd try to be sympathetic even if they screwed up. It also depends what the reasons are for the change of mind? Did they run out of money? Maybe then project can be postponed instead until they have it.

[brian-giles]

Thank you for your input Tatevik!