There’s an old thread on this subject: http://www.sitepoint.com/forums/showthread.php?t=248815 but without the answer I’m looking for…
In a nutshell, I’m hoping that someone is prepared to share the clause in their contract (between themselves as the web development company and the client) that discusses the issue of terminating the contract, i.e. under what grounds can one or other party terminate (or not!) the contract.
The issue has come up because my company is applying for professional indemnity insurance, and we need to nail this item down in our standard Ts and Cs.
Insurance issues aside, it’s a real issue that has cropped up a few times over the years, it goes like this: client signs up for a $10k website project, payable in 5 instalments of $2k each. We get about half way through the project, and notice that the client is behind on his agreed payments. Contacting the client to discuss the issue is a challenge, and when we do we get various excuses as to why he can’t/won’t pay any more (for now, of perhaps not at all). So on the one hand we’ve not “over exposed” ourselves because we’ve downed tools reasonably quickly (so we might not have “lost” much), but on the other hand if someone commits to a $10k project and they decide to stop paying the instalments through no fault of ours (i.e. we’ve totally kept our end of the bargain), then legally I’m sure that we could pursue the client for the remainder of the project funds.
So really want I want to include is a clause in our standard contracts that is a bit more binding/explicit so that a client is less able to decide to stop paying agreed instalment payments through no fault of our own. In other words, I’m looking for more legal “teeth” on this issue!
Can anyone help me with some words here, or any other general advice on this subject?