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A bit off topic - Design contract cancel


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#1 Tom Rogers

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Posted 29 September 2020 - 06:10 AM

I apologize for going off topic from Softplan but I respect many of the voices here and the scope of my situation.  I recently engaged in a design contract (phase 1 of 2 phase contract) that was not completed as the client decided to go a different route (purchase house) and cancelled.  Noting firm in my contract as to paying any money back (just says compensated for work done).  Since I am not sending them any deliverables, should I feel compelled to send any money (flat fee contract) back to client?  My phases are financially weighed more on the CD side and less on design, so the design portion is about only 1/4 of total project.  Or is fee kept justified with work done and loss opportunity cost?   


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#2 Jason Bishop

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Posted 29 September 2020 - 06:29 AM

No. You owe them nothing. I have it stipulated in my contract that if they cancel, no monies received will be reimbursed AND if they cancel after the Prelim but Before CD’s are complete, there will be an additional fee to compensate for time, etc.........to the tune of about 90% of the contract total.
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#3 Kevin Rabenaldt

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Posted 29 September 2020 - 07:32 AM

There are many factors that go into their decision to buy instead of build.  (Perhaps) Some of the work and interaction on your and client's part, as they realize the enormous task ahead of them, they decide building is not the direction for them.

 

You earned your money.  This is usually a hard concept for the general public.  Your time and talent is important.


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#4 Tom Rogers

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Posted 29 September 2020 - 10:19 AM

Thanks,  please note that it is not an issue of the client asking, actually he wondered if he owed more.  It is more of my ethic feeling that I have not supplied them for what was contracted for thus me not fulfilling my obligation fully.   


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"remember... what we are building today, should be what we want in the future"​
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www.residentialproductions.com

 

 


#5 Don Gibbons

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Posted 29 September 2020 - 11:17 AM

In situations like this, I usually total up my hours, multiply by my hourly rate and issue a cheque/invoice depending on the amount. I do little or no advertising so having happy clients(and being satisfied with my own behaviour) is important, even with ones who don't go through with their projects.


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#6 Brendan Smythe

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Posted 30 September 2020 - 02:21 PM

I'd send them something back for the incomplete C.D. phase. I bet it would go a long way with them and would result in more word of mouth referrals (tell them to write a google review). I feel it's bad mojo whenever you run into "easy money". Keep a little extra for your lost future time but give back the rest.


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#7 Sam Morgan

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Posted 30 September 2020 - 02:54 PM

I recently had this on a large custom.  I had done a lot of site work/topo on their property and just barely started on the preliminary floor plans when they decided to buy a home.  I totaled up the hours I spend on their project and sent them some money back.  I would not normally consider this, but he was a nice guy and the builder involved is someone I want to work more with and felt is was more of an investment than a refund


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#8 Tom Rogers

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Posted 07 October 2020 - 07:46 PM

I went back and did similar and sent back a check.  Can always call it marketing for future


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"remember... what we are building today, should be what we want in the future"​
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#9 Brad Graber

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Posted 08 October 2020 - 07:16 AM

I think that was all good advice given and a good move on your part.  Giving back to customers when possible in those situations has treated me pretty well through the years. 

I have take a few hard knocks through the years with some customers and been compensated nothing on those projects, but overall I look at those situations as loosing the battle, but winning the war.


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