I have a freelance web/graphic design business that I have been building for a while. I recently accepted a full time job at a company working in web development. My problem is that the job starts in a couple of weeks. I have made commitments to my clients that will be difficult for me to fill while I have the full time job, i.e. due dates, etc.
As I am the only person in the company (it's an LLC) it's really too small to sell. Here is my dilemma. About a year ago I moved from a large city to a small town in south east Iowa. Two clients that I recently picked up is the city I live in. Only a population of about three hundred people. And the transport company that is located about a block from my house. I live next to these people so I don't want to make anyone mad. I need someone to take over these projects (websites) if I can. These clients have already signed contracts and paid me half up front to begin work. We are in the early stages of the design process.
So what do I do. I don't want to get into any legal problems as there is a contract. I also don't want to upset anyone because I am neighbors with them. I just don't have the time any more to commit to what I told them I would do.
Any business advice would be much appreciated.
Legally you are obliged to supply what you promised, however there is nothing to stop you outsourcing some or all of the work elsewhere just ensure that the client requirements are adhered to.
How can you say that so confidently when you haven't seen their contract? Most good contracts have termination language that would guide the way that the contract can be ended.
Just be honest with your clients and you will be fine.
Tell them what happened, and offer to help them to place the project with another freelancer. As long as you priced it reasonably and can transition it gracefully, you should be ok. These kinds of things happen, and usually they can be gracefully handled through respectful and honest communication.
He has already recieved half the fee for the contract, unless the client makes demands outside the original agreement he is obliged to perform his part of the deal. This would apply even if the agreement was only verbal.
He could, as you say, go back to them with their money and explain the situation but in such a small town he may feel uncomfortable doing this.
BTW, I ran this past my wife who is a practicing lawyer prior to posting
As Sagewing says, any half decent contract will have termination clauses, which are put there for this very reason. Things happen, projects have to be abandoned, that's life - sometimes developers circumstances change, sometimes clients turn out to be psychos. I'm sure your wife will know about termination clauses in contracts. If he owes them money for work not performed, he'll have to pay it back. It may be in this case that he's best paying all money back and let the client's start again with a new developer, it really depends on how much work was performed and whether it is usable. Or he can help them find someone to take over the project. Lots of options, but hopefully he's got termination clauses backing it all up (which normally work both ways - i.e. clients are also allowed to walk away from projects).
If not, still shouldn't be a problem, the client will want to avoid being left in the lurch, so as long as the OP helps him in the transition to the next developer and all money issues are sorted fairly, it should all end well. If it happened to me and my developer told he he could not complete a project, I'd have to accept it and look at ways in which we could find a suitable replacement to ensure the work was still completed on time, to the expected standards and original agreed price. If that can be done, great, no big deal.
Receiving payment doesn't mean that there can't be termination or failure to perform language in a contract. Whether a contract is written or verbal doesn't change the terms of the contract. But, this is all academic because we haven't seen the contract in question so giving wild legal advice seems unwise. I doubt your advise was run by a practicing lawyer but if that's true she might need to review her contract law.
I hardly think she needs to review any aspect of contract law, she practices Company Commercial law for one of the 'magic circle' law firms in London - you can google 'magic circle' if you dont know what it means.
Obviously the agreed terms of the existing contract are paramount, but if there is no specific termination clause (and this does happen sometimes, especially if a local lawyer who does not specialise in contract law is involved), then early termination is dependant upon both parties reaching an amicable agreement.
Mguises first port of call should really be to look at his contract and/or discuss this with whoever drew up the contract to see what his options are. Even if there is a termination clause he may not want to use this as he is new to this town and these people are virtually neighbours, that is why I suggested that outsourcing the work to a 3rd party may be worth considering.
As shadowbox says, the client really does not want to be left in the lurch, so offering the client another option would help ease the pain.
Lets be frank- if you're the sole employee of an LLC the likelihood anyone is going to pursue legal action is slim. It's your reputation and face which is at stake. So that leaves the question, which requires no lawyer to answer, what obligation do you have to your clients which will piss them off the least? Probably a very frank and sincere apology with a concerted effort to find someone else to do the work at the same cost you promised them.
I doubt your advise was run by a practicing lawyer but if that's true she might need to review her contract law.
Seriously, what value does this add to the conversation at all Sagewing? One of two things happen when you bring up personal doubts like this publicly- 1) you're wrong, you insult a guy's wife, and you look like a jerk or 2) you get into an open battle with irishman (how can he not respond to your accusation?) which detracts from the topic, and you subsequently look like a jerk.
I'm not wrong and challenging someone's legal view isn't really a personal insult. Whether I look like a jerk is, unlike contract law, largely subjective.
No open battle, from I can see. I didn't reply to his reply, that was you.
The value that it adds to the conversation is that it helps to protect everyday readers of this forum from relying upon legal advice that was provided by someone who doesn't know the details of the matter at hand and has no qualification. I am still of the opinion that irishmans's legal advice was not consistent with contract law.
You can outsource this and still finish the contract. Or, you can have few weeks that are very 'crammed' and finish their projects and also go to work. I won't be easy, but this way you can deliver their work. Or, as others here mentioned, you can try terminate the account and refund the money you received. In the end it depends on how these clients would see it, if you can add 2-3 work hours/day after your now regular job etc.
The best thing and easier to do is to outsource the project. This will help you to finish the project on time but you need to learn from your mistakes.
You should have asked for more details and review it before you commit something to your client.
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