Website made, client won't pay
Ok, so this is my first big contract project. I'm a programmer by trade, and picked this up on the side. We have a contract, made by him, my first mistake. I'll try to keep this short.
Contract says we follow the laws of NJ. I am in NY. There is a binding arbitration clause that does not name a specific arbitrator. He outright says he will not pay the balance, $6k. I have already received $4k as down payment. The website, as loosely outlined in the contract, is about 95% complete, and the ''termination of contract'' notice by email came as a complete surprise. He claims it is because it is 4 months late. The contract states an ''estimated'' due date, and numerous emails after that due date never mention it again. We verbally agreed the date to finish was flexible.
So I tell him he has to pay or I'm taking it further. He basically says ''fine, go to arbitration, but give me back my $4k deposit''. Also, one of my many mistakes, is that he was the one paying for hosting, and therefore has the code still. He has the working website and my money.
I think ultimately I will go to arbitration, which I had never heard of before this contract. Should I do anything before that?
Re: Website made, client won't pay
I don't know anything about New Jersey law, but I know a lot about arbitration.
Arbitration may be expensive. If the clause seeks arbitration through the American Arbitration Association, the cost to arbitrate will exceed $4,000. That is also probably true of most other arbitration offices.
I have drafted many a contract for many a client. I agree that arbitration clauses have a benefit, especially if there is a large amount in issue. Therefore, if you are to draft a standard contract with an arbitration clause, I would seek arbitration in an amount "in excess of $5,000," which is the jurisdictional amount for small claims court. Of course, I would also place language stating that litigation must be held in NY, using New York law.
Mike.
Re: Website made, client won't pay
I don't know anything about New Jersey law, but I know a lot about arbitration.
Arbitration may be expensive. If the clause seeks arbitration through the American Arbitration Association, the cost to arbitrate will exceed $4,000. That is also probably true of most other arbitration offices.
I have drafted many a contract for many a client. I agree that arbitration clauses have a benefit, especially if there is a large amount in issue. Therefore, if you are to draft a standard contract with an arbitration clause, I would seek arbitration in an amount "in excess of $5,000," which is the jurisdictional amount for small claims court. Of course, I would also place language stating that litigation must be held in NY, using New York law.
Mike.
