What to do when your client is dragging their heels and hasn’t approved your work
This is a common problem for business owners in creative industries. The frustration arises when you aren’t paid for the work you’ve done. I hear you – it also happens to me. But you can put legal protections in place to ensure that you are still paid when a client doesn’t hold up their end of the deal.
It is important to understand that you cannot retrospectively change the terms with a problem customer, so I recommend you use the learnings to consider what you can do better in the future.
Your legal obligations
Service providers are obliged under the consumer law to deliver the services:
- Within a reasonable time and
- In accordance with any timeframes agreed on.
So when a client delays a timeline, you should communicate that to client ASAP. By law, you shouldn’t be responsible for a client’s delay, however I recommend that you cover the issue in your terms and conditions.
You also have an obligation to deliver the services that you said you would, so make sure you still comply with this obligation.
You will have agreed with the client to some payment terms – hopefully in your written terms and conditions. If you find that receiving payment on the completion of the work is not working for you, consider changing your terms. Here are some alternative options.
1. Staged payments.
Service providers can seek payment in stages. The stages can be referenced to time or based on stages of the work. If a client agrees to staged payment terms then this will be legally binding and give you rights to demand payment. However, make sure your payment stages are the same as the stages in your work. For example “payment required on delivery of first draft” will facilitate payment on your delivery of the work, whereas “payment upon the end of stage one” may not, if the client approval is required to end stage one.
2. Deemed completion.
If a client abandons a project part way through, the service provider is “stopped” from completing the services. This in turn can impact your ability to be paid. Your terms and conditions can include a clause whereby if the client does not give approval to you with a set time, they are deemed to have abandoned your service and you are entitled to be paid for the services provided to date. This has to be included in your terms and conditions to be able to do this. I would also recommend always sending warnings before you simply enforce a clause of this nature.
3. Additional costs might be charged.
Sometimes a delay by a client causes additional costs to the service provider. In these circumstances, you could include a contract term so that the client must repay you such costs. I only recommend clauses of this nature with extreme caution. A service provider needs to be careful not to charge clients a ‘penalty’ which is likely to be an unfair contract term, and unenforceable.
Where this does work, is when a client the service provider actually incurs additional costs as a result of the client’s delay. For example, the service provider has to pay money to a third party they had engaged or the service provider must engage third parties to assist provide the services in order to meet the deadline.
To be able to take this course of action there needs to be appropriate clauses in your client contract and the factual situation needs to be appropriate.