OK, I know I should probably just take a deep breath, chalk this up to a "lesson learned", let it go and move on. But I'm interested in your opinion of the situation...
A non-profit organization approached me to design and build a web site for them. I presented a written proposal, detailing everything I would do. The proposal also stated payment terms: 50% up front, 25% after the design review, 25% immediately after launch. They accepted the proposal, but I didn't have them sign a contract (my first mistake). They paid the deposit, and gave me some non-specific requests regarding the design ("fun", "kid-friendly", "not boxy", "good use of white space", etc.). I came up with three designs, and we had a review meeting. They didn't like any of them, and gave me some slightly more specific feedback: use drop shadows, give it a more 3-dimensional feel, incorporate our program's images, put an animation on the splash page, etc.
At the review meeting, it gets mixed reviews. The key player was not there, and several others were missing, too. So I put the site up on one of my servers, and grant them access. They look at it later, then contact me and tell me they're going to get a different designer. Huh? What happened? They now claim that it's just not what they're looking for. OK, fine. Web design can be like art - it's an aesthetic, subjective thing.
So I send an invoice for the 25% due after the design review. They refuse to pay, and say they're being "generous by letting [me] keep the deposit." They say I failed to deliver what they wanted. I tell them I believe I did everything they asked me to do, and said they should be specific about what I missed. No response.
I'm sure they're not going to pay. This is roughly US$1,000 we're talking about. So it's big enough to piss me off, but perhaps not big enough to warrant a small claims court case. I don't have a signed contract - only an e-mail trail and my notes from the design review meetings. Do I have any recourse, or should I just move on (right after I come up with a contract to use with future clients)?