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Contract closed with less than agreed-upon amount paid - how?

clevertiger
Active Member
Rachel M Member Since: Aug 20, 2017
1 of 11

Thanks in advance for your help!

 

I agreed to a fixed price contract of $250. The client funded $150 in escrow. The job was completed successfully, and the client approved the only milestone. The contract closed, and I was paid $150. 

 

The client asked how to pay for the remaining balance, and if they were going to get an invoice for the $100 that was still unpaid. I'm really lucky they were so honest and great to work with, because Upwork basically told me the only way for them to pay the remaining amount of the AGREED UPON OFFER was to send it as a bonus. This makes no sense to me. 

 

The client did send the remaining amount as a bonus, and I did get paid. I'm just wondering how this was possible to begin with, and why Upwork had no good solution.

 

Thanks again!

datasciencewonk
Community Guru
Kat C Member Since: Jul 11, 2016
2 of 11

I don't work unless each milestone is fully escrowed. 

 

If they only escrow one milestone and the other one is not funded then the FL basically relies on the trustworthiness of the client to fund the next one whenever they decide to do it (or if they're as fortunate as you, the client will pay the unfunded milestone as a bonus).

 

 

mthornton-cpc
Community Guru
Melissa T Member Since: Dec 5, 2014
3 of 11

Rachel, you did the full job on a milestone that only partially paid for the whole thing? It's easy to make sure that doesn't happen again. The solution is to not work on unfunded or partially funded milestones. If the job was $250, there should have been a single milestone for $250 or multiple milestones that added up to $250 set up when you accepted the offer. Going forward, when you get an offer, review all the milestones and job details to make sure they are what you've agreed to, otherwise request a change. 

mtngigi
Community Guru
Virginia F Member Since: Feb 15, 2016
4 of 11

@Melissa T wrote:

Rachel, you did the full job on a milestone that only partially paid for the whole thing? It's easy to make sure that doesn't happen again. The solution is to not work on unfunded or partially funded milestones. If the job was $250, there should have been a single milestone for $250 or multiple milestones that added up to $250 set up when you accepted the offer. Going forward, when you get an offer, review all the milestones and job details to make sure they are what you've agreed to, otherwise request a change. 


Melissa and Kat's advice are on target. But one thing I wish Upwork would do is explain cleary that a fully-funded escrow does not mean they're paying the full amount at the first milestone. Just a little block of copy in the bid window ... or something.

 

Because I think sometimes a client might not understand that the first milestone can be a partial payment with the balance going to the next milestone. I feel I have to explain this in my bid (though I don't always do that).

 

Curious what others think about this or how they explain it (if they do).

mthornton-cpc
Community Guru
Melissa T Member Since: Dec 5, 2014
5 of 11

I explain that by listing the milestones in my bid like you do, Virginia. When it's become obvious that a client hasn't understood the process I've just explained it either before I accept the offer or in Messages if it crops up after the acceptance. 

mtngigi
Community Guru
Virginia F Member Since: Feb 15, 2016
6 of 11

Nevermind ... my brain is not working well today.

clevertiger
Active Member
Rachel M Member Since: Aug 20, 2017
7 of 11

Thanks for all the advice everyone! I am new to Upwork and I believe the client was also.

 

I'm thinking something is lacking in the process. If the agreed upon amount is not paid, due to the client not funding/setting up all milestones and escrows, the contract shouldn't be able to be closed successfully. I'm not really sure why it was so easy for them to do. They could have easily walked away keeping the $100.

 

I will certainly be more aware of this going forward and try to help explain the process better to my clients as I gain a better understanding of it myself. 

mthornton-cpc
Community Guru
Melissa T Member Since: Dec 5, 2014
8 of 11

@Rachel M wrote:

Thanks for all the advice everyone! I am new to Upwork and I believe the client was also.

 

I'm thinking something is lacking in the process. If the agreed upon amount is not paid, due to the client not funding/setting up all milestones and escrows, the contract shouldn't be able to be closed successfully. I'm not really sure why it was so easy for them to do. They could have easily walked away keeping the $100.

 

I will certainly be more aware of this going forward and try to help explain the process better to my clients as I gain a better understanding of it myself. 


The thing is, the agreed upon price should be the contract value. In your case, that was $100 short of what you discussed with the client. You know that now, so I'm sure it won't happen again. If I discuss a price with a client, but they only create milestones to cover part of the amount I don't accept the offer until it's fixed. If I accept the offer of a lower rate and the contract starts at a lower rate then I will get paid at a lower rate. 

millermelanie
Community Guru
Melanie M Member Since: Jul 13, 2016
9 of 11

If the client only funds a milestone for half (or whatever percentage) of the work and agreed upon price, then you complete and submit half the work.  Then you tell them you will do the rest when they fund the rest.  OR they must fund the whole project and can break it up into smaller milestones.  Either way, you don't do ALL the work and submit it until ALL the money is escrowed.  Upwork can only protect you for the amount escrowed.  I'm glad your client was honest.  There are some who would have taken advantage of your mistake.  Some even intentionally set it up that way to defraud a freelancer.

clevertiger
Active Member
Rachel M Member Since: Aug 20, 2017
10 of 11

 

@Melanie M wrote:

If the client only funds a milestone for half (or whatever percentage) of the work and agreed upon price, then you complete and submit half the work.  Then you tell them you will do the rest when they fund the rest.  OR they must fund the whole project and can break it up into smaller milestones.  Either way, you don't do ALL the work and submit it until ALL the money is escrowed.  Upwork can only protect you for the amount escrowed.  I'm glad your client was honest.  There are some who would have taken advantage of your mistake.  Some even intentionally set it up that way to defraud a freelancer.



I actually submitted a proof file. But the client loved it and moved fast on approving the milestone and closing the contract. It was only afterwards that they realized, hey, I didn't pay the rest of the balance yet. 

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