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I am a lone developer who built a billing system for a customer as moonlighting job. We had worked together previously on a number of occassions and as a reults no contract was ever signed between the two of us, no were any precise requirements given up front. The customer supplied some very high level requirements and I worked with him to extract more detailed requirements as the system was built.

The customer has been successfully using the system for a few months now for it's exact indended purpose and it meets all of his requirements that were outlayed when the project began (a fixed price quote was given). He has paid the full amount of the software about 6 months ago. The customer hasn't yet accepted the software as 'live'. He has sent me two small defects in that period since he stared using the system for it's intended purpose. On both occassions I had a fix installed with two days.

After not hearing form the customer for over a month, I spoke with him yesterday, as he was wanting a quote for new work. I informed him that I am not taking on new work as I do not have time. At this point he told me if I do not do this work for him, for which he will pay, he will ask for his money back on the existing system. He rationale was that a system that cannot be supported is of no use to him.

He owns all intellectual property for the system and has all source code. When I mentioned that any developer could support the system, he said he wants the original developer to support it.

I have a very bad business relationship with this customer, after a number of refusal to pay invoices, and both do not wish to continue working with him, or doing any moonlighting of any type for any one, as I no longer have the motivation or the time, with a young family to look after.

I was wondering what the best way to handle this situation would be. I expect I'll need to seek legal advice. Is the customer entitled to his money back? ...even though he is using the system for it's intended purpose and he has generated considerable invoices from it (well into the hundreds of thousands of dollars, money he would not have been able to make without the system) and he yesterday said there are no problems with it. If push comes to shove I am now prepared to return the money. What about getting compensated for the work to build the system?

The question of providing ongoing support was never raised before an agreement to do the work was made. This has now been going on for 3 years, when it should have been a three month engagement. The system was completed, awaiting UAT, 3 months after we worked out the detailed requirements in September 2008. Since then I have made small paid changes and a number of free changes, as the customers business evolves, but he still hasn't formally accepted the system is live, even though I've told him it is Live and it meets all his initial requirements.

Really not sure what to do as the experience has put me off software development. A problem, as it's been my career for the last 10 years and the sole source of income for my family.

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    The answer to your questions may depend on the jurisdiction under which this case falls and what kind of agreement (oral or written) is in place. So you question and/or any answer may have to been seen in that context. Maybe you could give those details? Generally, no matter how good your relationship with your customer I would strongly recommend to have at least some sort of paper works in place, even if you don't involve a lawyer. – Manfred Nov 1 '11 at 4:34
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    I cannot imagine any jurisdiction that would mandate an original builder of anything to provide ongoing maintenance for the life of the product. – David Espina Nov 1 '11 at 10:38
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Tell him to pound sand. He is using the solution. He has zero case. You owe him nothing.

  • Thanks. I did just that. After thinking about it last night, I'm going to write up an email and let him know, in writting. He can do whatever he feels he needs to. I suspect if he could do the things he says he'll do, he'd have done them already. – Rob Gray Nov 1 '11 at 1:09
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    Even if he tries to sue you, I cannot imagine it would get off the ground. There is no paper contract to substantiate that you are not meeting promises, nor is there ever any implied promise of ongoing support after development of any product in any industry. His threatening this, along with his history of unpaid invoices, is more about his exercising his unscrupulous business practices than really about a legitimate dispute. Pick up your ball, get out of his sandbox, and go find others to play with. – David Espina Nov 1 '11 at 10:42
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You appear to have provided the contracted services, and as a result the client has a working system. Maintenance of the system is a different issue.

Normal cost of ongoing maintenance contracts, when available, has tended to be in the range of 10 to 20 percent of the original development or purchase costs. This often does guarantee fixes will be provided, only that the problems can be reported.

Your client got what he paid for. If he wants on-going support, he should be prepared to pay for it in advance. You might be able to suggest someone who can support the existing software on this basis. Don't feel obligated to do so.

At this point you have no obligation to provide on-going maintenance. He has the source code, so the software can be maintained. In this respect, he is much better off than many clients who have had software developed for them.

  • Cheers. that makes sense and confirms what I thought. The customer is offering to pay for support but I don't trust that he will pay and most importantly I cannot do the work any more. – Rob Gray Nov 1 '11 at 1:45
  • Maintenance should be payable in advance, but in your place I would not provide it. If I suggested someone, I would warn them about the customer. – BillThor Nov 1 '11 at 1:49
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Can my customer ask for his money back?

People can always "ask for their money back". You don't have to give it to them. I'm reminded of a quote from Henry IV:

Glendower: I can call spirits from the vasty deep.
Hotspur: Why, so can I, or so can any man; But will they come when you do call for them?

Sometimes, the spirits from the vasty deep need to say "sod off" when a polite "no" is insufficient.

Is the customer entitled to his money back?

Under US laws, under the circumstances you've outlined - no. Your profile lists you as living in Australia, things may be different.

If push comes to shove I am now prepared to return the money.

I have personally done this to get rid of certain types of annoying customers. As you may discover, there are some customers that will treat any form of payment as an irrevocable marriage. Only you know when it is time to fire your customer.

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    Thanks. More very good advice. I yesterday received via email a formal letter of acceptance of the system. I expect that my stance made him act. I've known in my gut for a long time that this is a business relationship that is not healthy. Time to Fire this customer :) – Rob Gray Nov 1 '11 at 22:19
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It looks like you have this solved, but it looks like you have all the power in the current situation. The client is paid up on their invoices and have paid for the system. In the last 6 months there have only been minor updates needed, it's being used, you have emails documenting acceptance or approval of the system.

If you have no contracts stating it is a 'work for hire', legally you own the copyright to what you produce and own the code / intellectual property for the project as well.

It appears from a legal perspective you are looking good.

  • Thanks for the feedback. Yes this has been all but completely finalised now. After reading helpful comments here I went and saw my accountant and she drew up an appropriate letter that informed the Customer that as our agreement is complete, so is our business together. Or words to that effect :). I did recieve formal notification from the client that he accepts the system two days after I posted this :) – Rob Gray Nov 4 '11 at 2:41

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