Legal Question in Technology Law in Arizona

Re: being sued for defamation, business losses, and theft...im just a programmer!

Actually, to clarify the above, a "work for hire" requires a writing, such as written contract. Case law is clear that absent a writing, there cannot be a "work for hire" under U.S. Copyright Law, and the files belong to the independant contractor.

See 17 U.S.C. sec 101 that defines Work for Hire as:(1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a WRITTEN instrument signed by them that the work shall be considered a work made for hire.

Re: being sued for defamation, business losses, and theft...im just a programmer!

You and your customer have an oral contract. The issues are which of you breached it first and whether that breach excused the other's non-performance.

The only way I can see for your customer to breach the contract would be by failing to pay you. It's not clear whether he did or not (your questions says only that he agreed to pay), but either way it seems you lived up to your end of the bargain.

The problem is that, when your customer initially refused to pay you, you resorted to self-help and took away the web site you had already put in place. If he had contracted to buy a physical sign from you and then failed to pay for it you would not have the right to take it back on your own (if you had both signed the appropriate papers you would have the right to reclaim it but would still have to go through proper legal channels). The principle is the same for services like yours. Your customer's web site was up and, having delivered it, it no longer belonged to you. You thus had no right to replace it with your message about non-payment, just as you would have had no right to do the same thing with a physical sign.

This brings us to the files on your computer. Are they yours or your customer's? Assuming that he has paid his remaining balance, the files you created belong to him. When an independent contractor is hired to create a website, document, artwork, etc., his creation is deemed a "work for hire" and belongs to the principal unless they have a contract which says otherwise.

But there is an added wrinkle here -- you actually did give him the files and then his partner mistakenly destroyed them. It's not your fault if your customer accidentally destroyed what he paid you to create.

Your customer's defamation claim strikes me as a non-starter. To be defamatory a statement must be false, and your statement that he hadn't paid his bill was true. But as I have explained there are other causes of action available to him.

I suggest offering to give him the replacement files in exchange for a release of his claims against you and payment of any balance he still owes. You should have a lawyer to draft the agreement since there are ways you might leave yourself vulnerable if you did it on your own.

Good luck.