And you were paid for it. THEN... the project gets delayed by maybe a year.

Customer decides to not go ahead with the project. Do you:

Give the money back?

Apply the $$ to a newer project?

Use the dough as a deposit on work to be performed?

Any legal precedents??

Thx in advance all.

Cheers from: Jeremy Pollard, CET The Caring Canuckian!
www[.]tsuonline.com

Control Design www[.]controldesign.com
Manufacturing Automation www[.]automationmag.com

 

Have they asked for the money back? You can probably ask to be compensated for any costs you incurred (including your time). You might be able to charge a reasonable cancellation fee above any costs (e.g. 10%). Most contracts that I have dealt with have a cancellation clause to cover exactly this situation.

If no goods or services actually changed hands however, the "sale" may be considered to not have concluded. If you want to keep the money, then you need a real lawyer to go over the fine print. Any advice you get here isn't worth the electrons it's printed on.

If the customer wants to spend the money on a different project with you, they will probably need to do something on paper where they cancell one P.O. and then issue a new one for the same amount. This is just to keep the books straight with their asset allocation.

 

Depends a lot on how the contract was written. Usually there is some kind of cancellation charge. And you should gte paid for the work already done, if any. Other than that, the money belongs to the client, you are just holding it. It is really up to them to decide what to do with it.

 

You really, really, really need to talk to a lawyer. Seriously. Do NOT listen to engineers about the law, any more than you would listen to lawyers about process control. The PO/contract probably has some details regarding this that need to be analyzed a professional.

My take, WHICH IN NO WAY REPRESENTS LEGAL ADVICE: I suspect you are entitled to keep any money already given to you but not entitled to any further payments. You may want to credit some of that back if you feel it's necessary to keep the customer satisfied. The customer should understand that you can't recoup time spent, or interest on money if you purchased material. (Accounting for some of this stuff could be a headache, too. Your WIP never becomes finished goods, so where does it go?)

Bottom line is the same as the top line; get a lawyer to review the situation.

-James Ingraham
Sage Automation, Inc.

 

Ignore all these other guys. Send the money to me in small unmarked bills, and I'll make sure it's safe for you.

Trust me.

MB
--
Michael Batchelor
www.IndustrialInformatics.com

 

If you are a CSIA member, you can get advice from Mark Voightman, the legal advisor to systems integrators. He has told us some serious horror stories about contracts. That's one of the reasons CSIA has developed a recommended contract for SI firms to use.

Walt Boyes
Editor in Chief
Control and Controlglobal.com
www.controlglobal.com
Mailto:[email protected]
Read my blog SoundOFF!! At www.controlglobal.com/soundoff