Client making false claims

We have had a client for a while and everything has been very smooth with him. Recently, we have been unable to contact him (for the past 3-4 weeks), and we were informed that his partners were not able to contact him either. He still owed us money ($675) so we started sending invoices.

Yesterday, he sent an e-mail with 15 accusations (14 incorrect, 1 correct) demanding his payment thus far ($1325) to be returned else he would sue us.

The accusations are things we can prove inaccurate or are for things we never agreed to do or even explicitly said we would not do. I already informed the client that his 1 correct accusation was indeed correct, but that we could prove his other 14 completely false.

However, my partner and I are just teenagers, while this guy has loads of money. I'm in school and run this business, so I don't have any spare time for legal issues. Would you suggest just paying him the money or actually attempting to get this overturned?

We were thinking of just giving the money, but provide a written agreement that the client will not pursue this in the future and that the matter is closed. What do you think?

Edit: Also, I have sent the client and his team an accusation-by-accusation rebuttal to his claims, have sent numerous text messages attempting to contact him, and have my partner calling him on the hour every hour to no avail. We assume he will avoid us during his 7 day deadline, after which he will take us to court.

if you have proof of the 14 incorrect accusations he would have to be an idiot to persue it, i have a feeling that he has run out of money and is clutching at straws trying to get some of it back

just let him know if he tries to sue you have the proof and he will end up having to pay your invoice as well as court costs and legal fees if he goes further

good luck

Don't pay, you'd be stupid to do so.

Kharis said:

if you have proof of the 14 incorrect accusations he would have to be an idiot to persue it, i have a feeling that he has run out of money and is clutching at straws trying to get some of it back

just let him know if he tries to sue you have the proof and he will end up having to pay your invoice as well as court costs and legal fees if he goes further

good luck

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^This.

Just out of curiosity, OP, why aren't you billing in advance for your services?

If you have proof (e.g. emails showing what you agreed to do) then don't refund him. Also threaten to countersue for the unpaid invoice.

While it seems prudent to defend ourselves, I'm really wondering if it would be worth the stress?

The problem is, a lot of the agreements we made were verbal, so while he has no proof we made the agreement, we also have no proof that we didn't/did. A lot of the accusations are also functionality-based and we have the code of the site with file date data proving that the existing functionality (that he says is not there) was implemented long before his accusations.

However, if we go to court, all we would win is the outstanding $675, correct? We would retain the $1325 and he would have to pay our legal fees? It just doesn't seem worth the constant added stress. I literally have almost no time to contribute to legal issues on top of school, meetings with current clients, acquiring new clients, and doing the actual work for clients. Also, would a lawyer/court have to be paid throughout the process or are they paid after all is said and done?

I'm thinking it may be best to take the loss and provide very specific written work contracts down the road for future clients? (Some of his accusations are for "not completing" or "not completing according to our agreement" things we actually did for free because we offered to do so and no agreement was ever made because it wasn't in his initial request and no additional money was ever given or requested for these things.)

If he sued for an amount that small it would be in small claims court and you would not have legal fees.

Do not pay him his money back. It would be small claims court for anything under 5000 USD. You won't need a lawyer. I think he's calling your bluff. Keep the information you have, learn from this experience and incorporate it into your contracts for the future clients.

Counterclaim if he does actually do anything. Worst case scenario, you'll have to pay the money if you lose plus court and filing costs (couple hundred bucks), but I don't think you'd lose, tbh. Don't let him walk all over you.

Yeah he's just probing to see if your stupid enough to pay it. Who was the initial transaction through i.e. paypal?

I would say to not given in to him, explain to him how you have more proof that would go against him in the small court. I am calling him bluff, and say that you have recipts and chat logs of him being content with the services you have done for him.

Hey bud,

First, Did you have a contract in place detailing the work specified for that amount? If you did not, did you have any paper trail that proves that you have clearly agreed on some sort of parameters for the work project?

If you have a contract in place, then go to court and prove with reasonable work and paper based claims that you have done your work.

If you do not have a contract, gather any and all e-mails and or any other level of correspondence between yourself, your partner and your client.

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If you go to court and do not feel that you have enough information to back against your claim- make a point that you made a clear and diligent attempt to fix and find a resolution for whatever accusations were made.

If he continues no longer to contact you- make an offer of to cancel your current work contract and that you will be willing to take off your accounts the $675 to end the dispute.

Then counter offer when he sends his hate message with a reasonable offer of about $100-200. (This will become most likely your payment at court, if you do not feel comfortable with the evidence you have provided). Bring this offer as proof in court.

If he still decides to continue and actually sue you, simply follow the court documents and respond diligently. They are simple and do not need to be complex.

If you go to court prepare the following:

Explain your current situations (Pull the student card when you are offered the chance in explanation)

The work you believed which was agreed upon
The work you believed which was completed (proof there of)
The work you have completed which counter his claims
The work you have put towards finding a reasonable resolution (This you start now and as early as possible) - Harass him to negotiate as it looks better on your part and document it.
Proof that the party was not willing to negotiate
Proof that you offered a reasonable offer, and counter offer

If you are confident that you have enough evidence, but still believe you have breached some sort of term of your contract, they will most likley go for the offer you have made.

If you are not confident that you have enough evidence, be prepared to pay at least half of your earnings.

artizhay said:

We have had a client for a while and everything has been very smooth with him. Recently, we have been unable to contact him (for the past 3-4 weeks), and we were informed that his partners were not able to contact him either. He still owed us money ($675) so we started sending invoices.

Yesterday, he sent an e-mail with 15 accusations (14 incorrect, 1 correct) demanding his payment thus far ($1325) to be returned else he would sue us.

The accusations are things we can prove inaccurate or are for things we never agreed to do or even explicitly said we would not do. I already informed the client that his 1 correct accusation was indeed correct, but that we could prove his other 14 completely false.

However, my partner and I are just teenagers, while this guy has loads of money. I'm in school and run this business, so I don't have any spare time for legal issues. Would you suggest just paying him the money or actually attempting to get this overturned?

We were thinking of just giving the money, but provide a written agreement that the client will not pursue this in the future and that the matter is closed. What do you think?

Edit: Also, I have sent the client and his team an accusation-by-accusation rebuttal to his claims, have sent numerous text messages attempting to contact him, and have my partner calling him on the hour every hour to no avail. We assume he will avoid us during his 7 day deadline, after which he will take us to court.

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Not in the debt collection field are you?

artizhay said:

The problem is, a lot of the agreements we made were verbal,

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NO NO NO NO NO NO NO.

Nothing quite like a lesson learned.

Ultimately, if it's worth more to you (alleviation of stress) to just pay the douche, pay him. Personally, though, I think you'll kick yourself later in life for not taking a principled stance....

Don't pay anything. As mentioned above, I think he's out of money and needs to get
it from wherever he can.

If you have the proof then let him take you to court. He's blowing smoke, be sure to
have all of your proof in order.

Also, I see that you're in the US. You mentioned that you and your partner are teens.
If you're under the age of 18 then it's illegal for an adult to make any type of
agreement with a minor. It won't stand up in court. However, some states will hold
the parents responsible for the actions of their children. That's one thing you should
investigate if t comes down to it.

Anyway, good luck and don't worry too much.

Edit: One more thing - from here on out don't admit to anything or promise to give him
a refund or payment of any sort, especially by email or text. This can be used against
you in court.

If his business partners are not happy with him going AWOL then I doubt they'll be supportive in court. He's got no case. Settle it with the other partners and you'll be fine.

Especially since the payment came from the COMPANY most likely and not him specifically.

This is not legal advice - I suggest you see/consult a lawyer.

Thanks, guys. I didn't realize this would be in small claims and would require no lawyer. If no lawyer is required, I am perplexed by this statement of his:

If we do not get our money back in 7 working days from April 4, 2012 we will be forced to turn this over to our legal council and sue you for damages, court costs, and lawyers fees. $1325.00 is due now and we demand payment.

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Suing for "damages, court costs, and lawyer's fees." There is no "company" here as this is a start-up operation funded by a couple dudes. The money he's paid us literally came straight from his wallet. Then there is also no company lawyer, of course, but I don't know if he has his own personal lawyer.

I'm worried though, that he could sue for some arbitrary amount, or an "estimated" amount at his whim at what he thinks all damages and fees will be, which could be $5001. If we reach this point, I assume it is too late for us to settle the matter if he does not wish to let us pay him? Because if he sues for a large amount, I don't want to risk all of the company cash to defend ourselves for an amount we can afford to pay.

Edit:
That being said, I'm not sure how serious he is about all of this. His 15th accusation was that we planted malware on his site with the intent to hurt his business (his "new designer" found this "malware"), which makes no sense considering we've been trying to contact him to finish the site and have no reason to infect him or his site, plus we have 40+ registered users that could testify against him and verify that there was no virus spread through the site.

We also have all files and SQL exports refuting his claims of unfinished work or lack of features, whereas he cancelled the hosting and cut himself off from all files/database access, and he nor his new designer (if this person even is real) has access to any server-side files.

This was my response to the virus claim alone (slightly out of anger) and I think we clearly communicate that we have full reason to believe he is lying and evidence to support it:

15. I would like to see the files for this virus, proof of stability and cleanliness of the receiving computer of the virus prior to receiving the virus, proof that the virus originated at [website].com, and very detailed reasons as to why no one else who has visited [website].com has ever received a virus from [website].com. We also have proof that none of our files for the site contain malware, viruses, trojans, bugs, or any other harmful data.

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Edit 2:
As far as his partners not supporting him because of an apparent lack of communication within his own team, his partners are actually family so it may skew things. His e-mail made numerous references to his 2 partners, but they have not contacted us or responded to our contact requests to verify that they support his claims. When we couldn't get ahold of our client for a while, my partner was able to get in touch with his partners and that's when they told us they (apparently) hadn't heard from our client. I was, however, not personally able to get in touch with them once we were unable to get ahold of our main contact.

artizhay said:

Thanks, guys. I didn't realize this would be in small claims and would require no lawyer. If no lawyer is required, I am perplexed by this statement of his:


Suing for "damages, court costs, and lawyer's fees." There is no "company" here as this is a start-up operation funded by a couple dudes. The money he's paid us literally came straight from his wallet. Then there is also no company lawyer, of course, but I don't know if he has his own personal lawyer.

I'm worried though, that he could sue for some arbitrary amount, or an "estimated" amount at his whim at what he thinks all damages and fees will be, which could be $5001. If we reach this point, I assume it is too late for us to settle the matter if he does not wish to let us pay him? Because if he sues for a large amount, I don't want to risk all of the company cash to defend ourselves for an amount we can afford to pay.

Edit:
That being said, I'm not sure how serious he is about all of this. His 15th accusation was that we planted malware on his site with the intent to hurt his business (his "new designer" found this "malware"), which makes no sense considering we've been trying to contact him to finish the site and have no reason to infect him or his site, plus we have 40+ registered users that could testify against him and verify that there was no virus spread through the site.

We also have all files and SQL exports refuting his claims of unfinished work or lack of features, whereas he cancelled the hosting and cut himself off from all files/database access, and he nor his new designer (if this person even is real) has access to any server-side files.

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Like we said, he's bumping his gums. Just hide and watch.

as others have stated the dude is hurting for cash, on principal i wouldnt give him squat.

do a preemptive strike, take him to small claims court first for the 675 or whatever.

see you on judge judy

If you are under 18, as another poster said, there was no legal contract. Unless he can push it criminally he can't do anything.

You are young. Play on that and play as naive as you possibly can. The judge will see that this is a case of some bully trying to push around a couple of kids for their hard earned milk money. Bring lots of paperwork and logs of work performed to show just haw hard you worked for the pennies you did receive.

Court is not hard. Don't let that stop you from standing up to this douche.

I am 19 and my partner is 20, just to clear everyone up on that.

andee said:

see you on judge judy

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I admit I had to lol at that.