Client changed request after purchasing hardware. Where do I stand?

Ahleckz said:
Don't enter negoiations regarding a cloud system, get them to warrant the current contract. If it is like you say, it's a pretty straight forward case.
Honour the current contract then run away.
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That's exactly what I'm doing :) I want nothing to do with them after this so I'm making it clear in another part of the document that I'll have nothing to do with the cloud system.

Scubascorpion said:
Option B sounds like a lot of hassle for you AND being out of pocket.
Neither of which is any of your doing.

Stick to Option A... in fact don't give them an option. Just send the invoice for the outstanding balance as agreed.

Keep it simple..
You agreed this > You owe this.
Not paying? > See you in court.
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Interesting point, if I was able to sell all hardware for the initially paid price I would only just reach the same financial outcome as option A. And obviously it's not going to sell for the brand new price...
 
Don't sell the hardware.

There shouldn't even be an issue. Any problems should be sorted out by referring to the contract.
 
Redgie said:
That's exactly what I'm doing :) I want nothing to do with them after this so I'm making it clear in another part of the document that I'll have nothing to do with the cloud system.
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What they wish to do outside of the contract you have with them is irrelevant.
Stick to details of what YOU signed with THEM and leave it at that. Anything else is not of your concern.

Your contract
Their agreement
Their payment for that contract
end
 
So after weeks of waiting round for responses, I've had this from them:

Client said:
Dear <me>,

Thank you for taking the time to detail your thoughts following our meeting in December.

You will recall the funds initially submitted to you where to cover the up front cost of the hardware as you did not have funds available due to your cash flow limitations as a student. These funds were supplied in good faith however a receipt was not produced until we requested one during our meeting in December. This receipt showed the words "Deposit" I would like to state that at no point were we under any impression this was a deposit, we have looked back through your original proposal and can clarify that a deposit was never mentioned.

<My name> we feel that although we appreciate your efforts and believe you did have honourable intentions, your proposal on closer inspection by two independent IT advisors was flawed in many ways from the initial build with several weeks "Stress Testing" which should have only taken a couple of days and only if there were faults on site to the functionality of the server and it's ability to add value to our business now or in future and finally our grave concern regarding ongoing support.

As you have stated (in your notes following our meeting) that the server and IT infrastructure on reflection would not be suitable for for ********* and it's future expansion to the Spa Resort, we would like to request this project be cancelled forthwith. This leaves the matter of hardware already purchased. We assume the server is fully operational as you were able to commence stress testing, bearing this in mind, we would like you to propose a way forward as unfortunately we have no option but to request a refund for the funds supplied to you to support the purchase of hardware.

We realise this will be disappointing for you as indeed it is for us, however we are confident of our findings and as you will appreciate the correct and future proof IT infrastructure of ********* and it's divisions is vital to ensure the smooth running of our business.

Please do not hesitate to contact me if you have any questions.


Kind regards,

********
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I'm getting a little bit worried now, there's no way I can refund them the money they gave because it was used to purchase hardware that has now devalued past the amount paid, purely because of the amount of time they've taken to come to a decision.

I certainly recall verbally stating that this was a deposit, but this is not written on a document as such other than the receipt which they claim to have never initially received.

Grumph.
 
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Seems like they are trying their luck here. They realise you are a student and they are a company and are trying to bully you.

You put in a price and they give you half of it as a "deposit".

They change their mind several weeks / months down the line and want a refund after stating that they gave you the deposit to facilitate the purchase of the hardware.

As I see it you have 2 options.

A) invoice them for the other half of the money as they are in breach of contract. IANAL but by paying half the total amount would indicate acceptance of your contract.

B) As you are not now going to finish the job invoice them for the remaining cost of the hardware and work already done and hand the lot over to them.

Difficult one to call and I am sure a few more people will give different views but a learning experience all the same draw up a contract and get a signature in future ;)
 
So they are saying that money paid upfront was to cover the full cost of the hardware?

This receipt showed the words "Deposit" I would like to state that at no point were we under any impression this was a deposit, we have looked back through your original proposal and can clarify that a deposit was never mentioned.
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How much did you quote for in the "original proposal" and how much did the receipt say they paid?

They paid you money to start the job (as per the "original proposal") and by paying some of it (deposit or otherwise) they'd agreed to start the work and you have contract and they have to honor it.

Duncan we feel that although we appreciate your efforts and believe you did have honourable intentions, your proposal on closer inspection by two independent IT advisors was flawed in many ways from the initial build with several weeks "Stress Testing" which should have only taken a couple of days and only if there were faults on site to the functionality of the server and it's ability to add value to our business now or in future and finally our grave concern regarding ongoing support.
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That's not your problem. You can't assess a proposal after the work has started.
 
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Welcome to the world of trying to run your own business these days, nobody wants to pay you, I know of a few people of differing trades who have gone bankrupt for things like this, the larger company's are the worse at reimbursing for works carried out.

Sounds like they gave you the money for the hardware, if they want that hardware then they need to pay the outstanding balance for it, the cant expect the hardware and the "deposit" back, what exactly does the invoice say? Does it say for 50%? Because if so then this indicates they owe you the rest.
 
Stretch said:
How much did you quote for in the "original proposal" and how much did the receipt say they paid?
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The receipt (Or invoice, really) showed a 50% deposit as being paid. The original proposal was for £3081.19 and so the deposit was for £1540.59, with the verbal agreement that the remaining £1540.60 be paid upon completion of the job.
 
With a couple of thousand quid at stake you really need to get proper legal advice, it doesn't have to cost a lot and could save you thousands.
 
Colbaker said:
Welcome to the world of trying to run your own business these days, nobody wants to pay you, I know of a few people of differing trades who have gone bankrupt for things like this, the larger company's are the worse at reimbursing for works carried out.
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A friend of mine has a company that does a lot of work for the council. They typically pay their invoices after about 120 days. (Despite agreed NET30 payment terms)

This sort of carry on is detrimental to business and it is shameful that it is being carried out by government and local government bodies.
 
Redgie said:
Interesting point, if I was able to sell all hardware for the initially paid price I would only just reach the same financial outcome as option A. And obviously it's not going to sell for the brand new price...
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Surely if you were able to sell it now you would have:

The 50% of cost deposit which they have paid
plus
Whatever you can now sell it for

Meaning that if you can sell it for at least 50% of the initial price, you will not be out of pocket?

Redgie said:
So after weeks of waiting round for responses, I've had this from them:

I'm getting a little bit worried now, there's no way I can refund them the money they gave because it was used to purchase hardware that has now devalued past the amount paid, purely because of the amount of time they've taken to come to a decision.

I certainly recall verbally stating that this was a deposit, but this is not written on a document as such other than the receipt which they claim to have never initially received.

Grumph.
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If they had concerns about your initial proposal (which they obviously did otherwise they wouldn't have had "two independent IT advisors" to verify it) then they shouldn't have accepted it in the first place.

They paid your deposit in order to secure your time, effort, and provide you with the security required to go make the initial purchase necessary to move forward with the project. The fact you couldn't afford the initial payment without this deposit is irrelevant - most businesses would require some kind of deposit from a new, unproven client precisely to avoid this kind of situation.

As far as I can see, your options are:

A) Insist on full payment from them for the original contracted amount.
B) Inform them that you will be selling the hardware to recoup your costs, and that they will be forfeiting their deposit as you require it to make up the shortfall and compensate you for your wasted time/effort.

The third option, is that you will sell the hardware, and use their deposit to make up the shortfall, as a gesture of goodwill you would be willing to return any excess once your costs have been covered. BUT make sure you point out this is a gesture of goodwill and you have no obligation to do this as they have breached the original contract.
 
Over the last year we have learned the hard way that you must confirm the brief back to the client at the time of the appointment letter. Whilst ours is Architecture the principle is identical;

Client A wants 1,2,3, and 4. Gets quote for services then thinks he/she is getting the thing monitored on site or that additional statutory fees are included.

I know its to late on this one but you really must in future when providing a consulting service send your fee quote back with a clear break down of what you are doing. Don't even start on the project until you have that break down signed and returned.

As it stands now you have an implied contract in that they have paid an invoice, this does stand in your favour, however it will be frowned upon if it went to small claims if you don't have something that shows clearly what that invoice relates back to. As stated I would try my hand at just invoicing them now for anything that you are out of pocket for but I would probably waive any "man hours costs" as a good will gesture. Its better to make nothing on this one and learn than it is to be nearly 2K down
 
Just tell it to them how it is - work out the amount you're out of pocket for the equipment minus it's current value (eBay etc) and then tell them they owe you the difference if they want to cancel.

Seems the cheapest and fairest way forward.
 
Stop 'discussing matters' with them and get some legal advice. Make it black and white for them or they will continue to bend you over.
 
BennyC said:
Stop 'discussing matters' with them and get some legal advice. Make it black and white for them or they will continue to bend you over.
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This is probably the best course of action really.

If you feel like giving it one more go to sort it on your own, give them the option of:

"The third option, is that you will sell the hardware, and use their deposit to make up the shortfall, as a gesture of goodwill you would be willing to return any excess once your costs have been covered. BUT make sure you point out this is a gesture of goodwill and you have no obligation to do this as they have breached the original contract."

And tell them that if they don't feel this is a reasonable offer you will be seeking legal advice.
 
With no disrespect to the posters who have already given advice, get yourself signed up to the UK Business Forums and ask the legal eagles on there, they have a dedicated legal forum.

Also take the names and identifying information out of your posts, try and keep it anonymous.

Good luck, sounds awful and stressful! Remember though although it is a company you are dealing with it's still a person answering letters/email/phone and they are possibly as clueless as you are unless they have dedicated legal help.
 
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