Releasing finished work and escrow question.

[ri3dviz]

Let's say the escrow is funded I release the finished work/files to the client and they refuse to release the escrow. This is a fixed fee contract question.

What recourse do I have and what protections does Upwork offer?

Thanks in advance!

[wlyonsatl]

What's the total $ value of the funded escrow?

[ri3dviz]

It was a simple question. That's not relevant unless you're elluding to the arbitration that Upwork offers which is a joke.

[wlyonsatl]

My question to you was also simple, Robert I.

Good luck!

[ri3dviz]

You don't answer a question with a question Mr. Guru. I asked what are the remedies and you asked a question. Maybe you should re-think being a moderator.

[wlyonsatl]

I'm not a moderator, Mr. I.

But, as I said, "Good luck!"

[prestonhunter · Accepted solution]

If you were hired to do a fixed-price task, then the client's credit card was already charged to fund an escrow payment.

You then send files to the client. The client is supposed to release payment to you.

The client can NOT do anything to unilaterally get that escrow money back. The money is intended to go to you.

The client can request a refund. But that refund request will go to you, and you can deny the request.

If that happens, then the next step is dispute/mediation. If that doesn't resolve things, then the next step would be arbitration.

Also, it is possible for a client to continually click "Request changes" in order to block release of payment. In which case you an initiate a dispute.

Bottom line:

It is not at all easy for a client to get escrow money back if the freelancer wants the money. But the client CAN jam things up for the freelancer and delay release of payment.

Do you (as the freelancer) have "protection"? Sort of, yes. But it is not "perfect" protection. And it IS possible for a committed client to be a real pain about things.

So I advise freelancers to create their own protection:

When you are dealing with a client you haven't worked with before, start with only SMALL fixed-price milestones/tasks. Maybe only an hour or two worth of work.

Then, if the client honors the fixed-price contract model and releases payment as expected, you can agree to increasingly large milestones/contracts. The client has demonstrated that he can be trusted.

But if the client tries to jam things up, then you can simply walk away. You haven't invested so much time. So rather than dealing with endless change requests, scope creep, dispute, mediation, arbitration, etc., you can simply close the contract yourself. You might forfeit an hour or two of pay, but it will be better than dealing with a bad client who is using fixed-price loopholes and technicalities against you.

[wlyonsatl]

Preston,

Your refer to "...the next step is dispute/mediation."

Do you really think Upwork allows fixed price disputes of any value to go to arbitration?

We have been told that is not true. And it wouldnt be a good business decision if Upwork did.

[ri3dviz]

Upwork offers a remedy, they don't decide who accepts arbitration. Let's stop now I got my answer.

[prestonhunter]

re: "Do you really think Upwork allows fixed price disputes of any value to go to arbitration?"

No, I do not think that.

The original poster posed a general question, without specifying a dollar amount.

And I was providing a general answer, without extensive details. The fact that Upwork might pay out money to both freelancer and client, taking a loss itself, is a "further detail" that my post didn't cover. This is something of an "unwritten rule," thought, and it is not something that a freelancer should "count on" as part of a proactive strategy.

[ri3dviz]

Thank you! That's what I wanted to know. My solution is to watermark my files until the escrow is released, which can put off clients a bit but I'm tired of suing people for un-paid bills.

[prestonhunter]

re: "My solution is to watermark my files until the escrow is released, which can put off clients a bit but I'm tired of suing people for un-paid bills."

That is "a solution."

It is not a solution that I recommend.

When I am hired for a fixed-price contract, I provide continual complete access to all of the work, from the very beginning. My files are on a central server available to the client, and he can obtain them at any point in time.

This may not work for everybody, but this approach works for me.

It is essentially the opposite approach from what you are suggesting: watermarking files.

I can't tell you what to do... But if a freelancer watermark the files and thus prevents the client from using them, the freelancer is really NOT doing things the way that Upwork intends.

If this works for you... that's great. But if the client disputes or asks for a refund on the basis of the freelancer not providing usable files, the client would be correct.

[prestonhunter]

MOST clients will "play ball." MOST clients are here just because they want to get some work done that they can't do themselves, or they don't want to do themselves. So if they use a fixed-price contract, they will follow the rules and perhaps more importantly, they will follow the freelancer's instructions.

So a freelancer can walk them through the proper steps if necessary.

The end result is that both sides benefit.

But SOME clients will play games with fixed-price contracts.

There is no way to know ahead of time which clients will be good fixed-price clients and which will NOT be. That is why I advise proactively starting small and being willing to end things rather than getting into protracted battle over money.