Legal Question in Business Law in California

Re: Web site design contract cancelation

Without reading your contract it would be difficult to give you accurate advice, but I can give you some ideas. With this said, please note that any ideas or advice I give you below are merely based upon speculation and therefore may not be valid per your particular situation.

1. Is your receiving money contingent on your completion of the work or..

2. Were you charging hourly?

If the contract reads that receiving money from your client is subject to job completion, then in theory you may lose the installments that they paid you. In the alternative, since they interfered with your performance of the contact by not upholding their obligations, you may be able to keep the money that they already paid you as the reasonable value of your services.

However, it appears that you may have been charging hourly since you were given installments, but again this is pure speculation on my part. If they interfered with your performance of the contract by not reviewing your preliminary designs etc., then the result should be the same as above.

In regards to a possible claim, if the amount that they want back from you is less than $5,000.00, they will probably sue in small claims. If they do file a small claims action against you, they are doubly screwed right off the top for at least two reasons:

1. Plaintiffs cannot appeal and..

2. Plaintiffs must prove their case by a preponderance of the evidence.

3. Some judges with a 50/50 split in testimony will favor the defendant.

If you feel they still owe you money, then you should counter sue for the reasonable value of your services.

Good Luck

Re: Web site design contract cancelation

This looks like a fairly typical example of adifficulties-during-performance contract dispute.

In court, each party will charge the other with breach and ask for damages. The decisive issue will be which party made the first material breach of the contract. At that point, further performance by the other party is excused and therefore is (generally) not a breach by that party.

Identifying the first truly material breach (and determining which is the breaching party) requires a lawyer to read the contract. My guess, however, is that your client's failure to deliver copy to you was the first breach, but their lawyer may see it differently.

By the way, "irreconcilable differences" is a term from family law (a ground for dissolution of marriage) and is not used in contract law.

Damages for downstream harm flowing from breach of contract, such as lost profits from not having a Web site up and running, are called "consequential damages" and are not always available in a suit for breach; you have apparently protected yourself (if you should lose the case, which you probably won't) by disclaiming responsibility for what you call "damages to business."

Unless your are putting the best possible face on a bad set of facts, you would probably prevail in court and I see no obvious reason to back down and return any money.

Re: Web site design contract cancelation

Anybody can sue anybody, anytime, for anything. That is the problem. If they sue, a corporation must hire counsel to defend. You should hire someone now to 'educate' them about the reality of this situation. It might avoid the suit being filed. Contact me if interested in doing this right; I've been doing these kinds of cases for 30 years.

Re: Web site design contract cancelation

Without looking at the contract, and assuming that the delay and/or cancellation were not your fault, you should be entitled to the reasonable value of your services, if not the full amount of the contract. If they should sue, you probably would want to counter-sue for the value of the contract or of your services. Good luck!