How to Recover When a Freelance Client Breaches Contract
So you have worked your booty off on a project and your client refuses to pay. Maybe its creative differences, a disagreement about deliverables, or maybe they even ran out of money.
Whatever the reason, there is no excuse for not getting paid. Period. Fullstop. If you have a client service agreement in place, that is.
If you don’t have an agreement in place, it is time to create one. No matter who you are and what your medium is, whatever you create, and whoever your client is – YOU NEED A CLIENT SERVICE AGREEMENT. It is the only way to do business as a professional and protect your intellectual property.
Read the first part of this series, What to Do When Your Client Doesn’t Pay. There I give you tips on vetting clients, the essentials on what to include in your client agreement, and red flags to watch for. This post assumes you have a client agreement signed, have done all of the work agreed upon, and your client still won’t pay.
From my experience, most clients are late payers rather than non-payers. Late payments aren’t fun, but sadly they are the norm. There are a few things your can do to speed up payment. First, send your invoice the day after a project is complete.
Delayed invoices mean delayed payments. If you are facing late payments, politely remind your client about the terms of the contract and remind them they owe you money. Be squeaky, send emails or make calls once a week until the check arrives. Be polite but let them know how their late payment is impacting your business.
So what if a client straight up threatens not to pay you?! Take a deep breath. The threat of not getting paid for a project you have worked hard on can be overwhelming and a kick in the creative gut. Try to focus on the outcome — getting paid — and focus on the things to make that happen.
Here are the 6 things you can do to get paid when a client breaches your contract:
1. Stay confident. You deserve to get paid for the work you’ve done. Its important you stand up for your right to get paid. The prospect of getting stiffed can be a real downer. Make sure you share your story with friends, find support, and don’t get bogged down. Don’t let your quest to get paid pull your other projects into the gutter. Also, avoid airing your grievances on social media.
2. Register your Copyright. Whether you decide to retain the copyright to your work or transfer it over to the client, your contract should stipulate that copyright is transferred or your creative work is licensed upon receipt of the final payment. You own the copyright to the work you have created. Check out this class on how to protect your intellectual property.
Whether you have created a video series, photographed head shots, or created a music track — registering your copyright protects your work and gives your legal leverage. Where ever you are on the planet you can register your copyright at www.copyright.gov. The $55 fee is worth its weight in gold. You can watch a tutorial on how to do it here.
3. Treat everyone like an ally. If you have done work for a company it’s important to treat everyone with respect. Follow the golden rule even in these challenging moments. It is hard to know who the real decision maker is in the situation. Assume the best and stay upbeat.
4. Show up and be creative. You’ve sent emails, made calls, and you aren’t getting anywhere. Show up to your clients offices or home and request payment. Be creative not confrontational. Maybe you print the invoice and attach it to a dozen balloons? Maybe sing your rendition of Johnny Kemp’s “Just got Paid.” Be creative because I know you are.
5. Mediation. So, your balloon delivery does not result in payment. Its time to go to the mediators. Your contract should include a mediation and arbitration clause. Contact the mediation organization you’ve assigned in the contract and inform them about your situation. Depending on the organization you’ve assigned, they will reach out to your client and attempt to arrange a meeting. If the client refuses to join the meeting they are official in breach of contract.
6. Lawyer up. Hire a lawyer to send a letter requesting payment, but make sure this step if worth the money. Depending on the lawyer, theres a good chance you’ll spend over $1000 on this. You have to decide if this is worth the money. Rachel Rodgers says she has a 90% success rate when she sends request for payment letters. Not bad 🙂
7. Small Claims Court. If hiring a lawyer is outside of your budget, find the small claims court in your area. Small claims are generally used for claims less than $10,000. The first step to a small claims case is sending a letter requesting payment. Here in California, small claims courts have a letter generator. These letters request payment and set forth a timeline for delivery. If your client doesn’t deliver within that timeline, you’ll want to move forward with the small claims process.
8. Collections. One other option is to hire a collections agency to get paid. This is not the best option as many collections agency charge 50% of all money collected. If gathering 50% of what you are owed is worth it, this could be a good option for you. Let the endless phone calls begin.
9. Avoid a public airing. Search the web and you’ll find success stories of freelancers using social media to get paid. If that feels right for your situation go for it, but I would avoid this approach. The last thing you want to do is alienate future clients.
Have you fought to get paid? Tell us your story in the comments below. We want to hear what you’ve done to to get un-stiffed.
If you’re ready to start a freelance business, or get serious about growing your existing client base, download our free eBook, The Freelancer’s Roadmap.
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