- Breaking Up with Clients Legally - Love Your Legals

Breaking up is legally hard – particularly when it’s with a client.

Clearly, this is NOT the outcome we envision when we accept a new client, and for most small business start-ups, it causes huge anxiety to turn down work.
BUT sometimes, there are differences in opinion over scope, deliverables, even pricing and values, which cannot be resolved.
And sometimes, no matter how hard you try to make the relationship work, what you are being asked is way beyond reasonable. You realise that this has become a toxic situation for all parties involved.

Genius Tip – Ensure your Client Agreement/Service contract provides you with an exit clause that allows you to cease working, get paid for the work you have done to date, and recoup any additional expenses without a long and drawn-out battle.  Make sure you revisit your Client Agreement/Service contract regularly, review and update to ensure your exit clause does its job when you need it to.

How do you let them down gently? 

It depends on why you are firing them. I always advise against artificially inflating prices or referring the client to someone else.
Perhaps your services are no longer a good fit, or they are failing to meet their obligations while working with you. Still, these matters are best managed by a well-drafted client contract that outlines obligations and provides you with an exit clause – meaning you can identify the gaps professionally and make a confident decision to terminate if necessary.
Generally, confirming in writing the client’s obligations and managing your client’s expectations is good business practice.

State how you will be transferring any files or account profiles, or completing any current projects, and then end your professional relationship.
It is best to maintain your professionalism in all circumstances, and it’s your contract that allows you basis for terminating and remaining professional and organised in the process.

If an agreement has not been signed, then your breakup could become messy.

Logistics of breaking up with clients legally

Your client contract should include details of intellectual property ownership (who owns the data, the work product, and the output) derived from your working time together.
If you’ve been providing a service, then you should agree on a date after which your work will be terminated, your accesses and permissions will be revoked, and any hosting or ongoing management duties will be performed by another party.

What about online e-commerce and product sales?

There’s always that “one” person who tries to make life unpleasant. And if they’re trolling, bullying, or otherwise acting inappropriately, then you should not hesitate to ban them from your site, as their behaviour can deter other customers.
But if you’re selling products online, should you BAN customers who ask a lot of questions?

Absolutely not! 

Remember, engaged customers will ask valid questions more often than people trying to be painful. Questions are an opportunity for you to develop and improve your business, website and potentially even your product offering.  Critically assess your FAQ’s to see if they actually give the best information, detail your sizing chart more clearly, ensure your language reflects precisely the products and services you offer and what you do not offer.

When someone asks a question:

  1. Welcome the questions as opportunities for improvement that have highlighted gaps in your information
  2. Use those questions to examine, and update your Terms of Sale, update your FAQ’s and sizing chart.
  3. Create a blog around the issue, and remember your SEO Keywords!
  4. If you have a particularly difficult or complicated sizing chart or purchase process, explain using a video

People who ask questions:

  1. Are interested in your products (or they wouldn’t have taken the time to ask)
  2. Want to buy (they just need to work through their concerns)
  3. Will help you learn, gain customer insight, and grow from their questions

 Red Flags

There’s definitely some behaviour that can often signal the beginning of the end.

  • They repeatedly try to negotiate your fee down (one attempt is fine… you can’t blame them for trying!)
  • They indicated directly or indirectly they are a better judge than you of your estimation of your time and effort (“It won’t take you more than an hour to do that!”)
  • They’ve suggested that if they had the time, they would do the work themselves. (they don’t have the time, so the choice is theirs)

These red flags could suggest that the client may not be a good fit for you – personally or professionally.  It can also indicate that the client will never value your work appropriately and lacks an understanding of your skills.

But I’ve already sent the quote – what can I do?

It is ok to say no and withdraw from the quoting process because it doesn’t feel right.

Genius Tip – a quote is an offer (and that is all) – you can withdraw your offer at any time before accepting payment or further instructions.
You can choose to say why you are withdrawing, for example:

  • “Based on updated information, I feel I have underquoted and withdraw my estimate.”
    • This usually happens when you realise the scope has changed after you have sent the quote. The customer returns saying that they have been working out a few more things about what they want – sound familiar?
  • “My fees are based on industry standards and are therefore not negotiable.”
    • Make sure they are based on research and industry standards!

Remember that this is YOUR business, and you get to decide how you want things to happen.  If you’re not happy with a client relationship, then you have the power to change it – but your client contract needs to be well-drafted and in place to support your decision.

You can always contact me for a quick chat or purchase one of my legal templates that will start you on the right path towards protecting your service and profitability.

XX Shalini