Milestone Dispute

[akashk6858]

Hello guys,

I need you to help you to understand the process of a dispute. I have worked on a fix price contract with milestone $75 + $75 + $150 . First 2 milestone was approved by client with satisfaction but on the last milestone when I have completed the work he is not agreed to pay the last milestone and I have put a dispute. 
Now client and mediation expert want to go to third party arbitration and that cost $291(non-refundable) for each of us. I don't want to go to third party arbitration and spend $291 for a small amount of $119. This is clearly against the freelancer and I don't think there should be a third party arbitration for this small amount. Now the only way I see is to refund the last milestone payment. Let me know if you guys have any suggestions for me.

Thanks,
Sandeep

[JoanneP]

Hi Sandeep,

Thanks for reaching out. I can see that our mediation team is already assisting you with how this dispute can be resolved. Please feel free to follow-up on your dispute ticket so that the mediation team member can assist you further. 

[akashk6858]

Leaving a note here:
I had accepted to refund because not had any other option at that time. I can't pay $291 to get $150.

[prestonhunter]

Sorry that you had this bad experience.

Fixed-price contracts can get freelancers jammed up if they don't understand them thoroughly and think proactively about how to avoid bad situations with clients.

This may be a topic you wish to study more about. Or stick with hourly contracts.

[wlyonsatl]

Sandeep,

I'm sorry to read about your experience. Small value fixed price contracts are heavilty dependent on the client being honest and willing to pay for work completed. With arbitration as the final option for the freelancer, it really is no option unless a certain minimum amount is in dispute. That amount is literally $291, but counting in the uncertainty of the arbitrator's final decision and the hassle of the time-sucking process, I'd guess arbitration is rarely used by freelancers unless at least $400 - $500 is in dispute. And maybe not even then.

Good luck with your future projects!

[prestonhunter]

Basically:

I advise that freelancers take proactive steps to avoid disputes.

I prefer to limit the size of initial fixed-price milestones, to no more than an hour or two worth of work.

That way, if the client turns out to be somebody who can't be trusted with a fixed-price contract... I can simpy walk away rather than getting involved in a dispute.

If I do a few smaller fixed-price milestones for a client and she demonstrates that she pays as expected, then I can trust the client to commit to larger fixed-price milestones.

[bobafett999]

Sandeep on a fixed price contract there is always the possibility that last milestone will not be paid.  You need to structure the payment schedule such that you don't fall behind.

Now if you have honestly fulfilled the terms of the contract you may want to force your buyers hand by going to arbitration.  If he doesn't pay his share you win by default.  You get 291 + whatever is in escrow. 

The safest thing is to do hourly contract with time tracking.

You have made good money on upwork so you know the rules.