In October 2019 client signed a contract for industrial design work and paid a 50% deposit. We began work and carried on as normal.
In January the project went out to a factory and client went silent.
In February we reached out to client to see how things were going. Client claimed the work was faulty and could not be produced. We offered to revise it, but client said she had moved on. Client demanded a refund, and we did not respond.
Yesterday (4/30) client again demanded a refund and threatened legal action if not refunded in seven days.
We did a great deal of work in good faith, and do not believe we owe a refund. Revision is normal in industrial design work, but we were never given any feedback or opportunity to revise. We have a boilerplate contract with a few approved revisions by client.
Not a lot of money is involved, but I would like to explore our options.
2 Answers from Attorneys
If the client did not communicate and terminated the contract unilaterally, it may be considered 'bad faith'. Judges and mediators don't like that. Nor will the judge like that you didn't respond when the client demanded a refund.
I don't know how much is 'not a lot of money'.
A lawyer is probably going to ask for a $5,000 retainer before he or she begins 'legal action'. And then you'll need to hire a lawyer, and the matter is going to snowball.
A carefully worded letter in reply I think would be appropriate, spelling out how the entire situation developed from beginning to end. Factual and fair, and offering a compromise.
That's my advice.
I understand your concerns.
Realistically, to answer your question the contract needs to be reviewed to determine your rights and responsibilities (and of course the client's rights and responsibilities) and this can only be done as part of a legal consultation. I offer a flat fee discounted consultation for LawGuru users which would include a review of the contract and a discussion with you.
Please go to this link or contact me directly.
Roman R. Fichman, Esq.
www.TheLegalists.com │ @TheLegalist
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