Non refundable deposit

pollutionblues

Hi All,  The forum team advised me to post here Just before I explain my issue. I live in Scotland. Apologies about the length of this post Our son (25) runs a very small website design business. All his customers are local people who are very happy with his service. He has multiple disabilities and struggles with communication so I communicate with his clients and deal with all the paperwork such as quotes, contracts etc on his behalf. I do not take any payment from the business as I just act as a facilitator for our son. In January this year one of his clients (a local charity) who at the time my wife & I were good friends with the chairperson (I will refer to them as S) asked if our son would build a website for her boyfriend’s (I will refer to them as R) new business venture. My son agreed and they informed us that R had already prepared a design for the homepage of the website and would be designing the other pages going forward. I sent R a quote which he was happy with. I then sent R a contract detailing the obligations of him as the client and my son’s business, payments costs etc. How we work things is clients pay for domain names, hosting etc up front. We also ask for an initial upfront payment of £200 as a non-refundable deposit with the rest of the fee payable just before the website launches. R was happy with this and signed the contract immediately. I then sent an invoice to R with the initial costs which was then paid for from the bank account of the charity that S runs. R then sent us the design for the home page which was to be frank hideous but the customer is always right so our son got to work building the home page. R had also said that he wanted 5 other pages, a shop and a membership system. Once our son had completed the Home page we sent it to R who was very happy with it, he assured us the he would be providing us with content for the other pages. We asked him in an email to send us things as he had them. During this time my son worked on the backend parts of the website creating placeholders for the other pages that R specified, setting up and testing the shop, membership system and a few other things. The total number of hours worked was 9.5. For the next 4 months R & S assured us verbally that R would provide us with content but none ever arrived. In June this year my wife & I removed ourselves from S charity (we were committee members) as S was attempting to take a local business to court to raise money for her charity which my wife & I disagreed with on a moral level. S had previously used phrases like ‘I love taking people to court’ and ‘I’ll take people to court who p**s me off’ From our son’s point of view S & R were still clients and we would always be professional regardless of any personal feelings towards S. Shortly after we left the charity S email to say that she was moving her website to a new company. She did not pay for the initial website as our son donated it to her charity as he believed in its ethos but this is a different matter (I may make another post specifically for this) we sent her all her files and the website was moved. Nothing was ever mentioned about R’s website so we assumed that he either did not have any more content yet or didn’t want to continue with the website and would just let the hosting expire and not renew when we sent him a reminder. In the middle of November we received and email from S using her charity email address saying that only the home page had been completed and no further work would be done on the website and asked for a refund of the initial £200 deposit. I emailed back explaining that the contract clearly stated that the £200 is non refundable and was signed by R and that the deposit covers not only building the pages but also the backend work that my son had already completed. We offered to refund them some of the hosting costs as a gesture of goodwill but not the deposit as the value of the hours spent working on the website is far higher than the £200 deposit and that we would send them the website files for them to do as they please. They then started threatening court action claiming that the backend work had been made up to try and keep the money. This is not the case. They then emailed saying that the standard of my son’s work was poor and didn’t meet their business expectations!  I pointed out that R had seen my son’s portfolio before asking home to build the website. That R himself had designed the page not my son and that at no point did R ever express concern about the quality as he had used phrases such as ‘looks good’ and ‘very nice’ previously. I reiterated the offer to refund some of the hosting costs and provide the website files but we would not refund the £200 deposit as our son should be paid something for the work he has already completed. As far as I can see our son fulfilled all the obligations set out in the contract that R signed. R did not uphold his part of the contract by not providing my son with anymore content or communication to complete the website. Are we within our rights to keep the £200 deposit as it’s stated in the contract as R did not uphold the agreement? Any advice greatly appreciated  Thanks

sgthammer

However small the business, your son's entitled to the agreed payment.

But why were the charity's funds being used to prop up the chair's boyfriend's business venture?

Unless there's some obvious commonality of purpose, it sounds like a case for the relevant regulator.

I'm sure the chair will see the sense in writing off the sunk cost. It's a shame you're no longer on the committee, it sounds like a good barney is overdue there.

marcia_

 As above the charity funds should not have been used that way. Tell her to back off or you will report her to the charity commission 

https://www.gov.uk/complain-about-charity

Woodstok2000

If you want to fight fire with fire, I would suggest sending them a full formal breakdown of all the time/costs youve incurred and an invoice for anything over and above the £200. Start chasing them for full payment with all the evidence they were happy with the work. Worst case scenario you write off your costs and keep the £200 anyway, but at least you're starting the negotiation from a stronger position.

Savvy_Sue

marcia_ said:

 As above the charity funds should not have been used that way. Tell her to back off or you will report her to the charity commission 

https://www.gov.uk/complain-about-charity

In this case, assuming charity is registered in Scotland, it would be the OSCR https://www.oscr.org.uk/

Personally I'd seriously consider reporting her even if she does back off! I might also contact the other business and see if you can strengthen each other's cases.

pollutionblues

Thanks to everyone for your replies. Its really appreciated.

We are going to put our concerns to the other Turstees first as the chair cant continue like this.  If the Trustees dont resolve it then we will go to OSCR.

Woodstok2000 said:

If you want to fight fire with fire, I would suggest sending them a full formal breakdown of all the time/costs youve incurred and an invoice for anything over and above the £200. Start chasing them for full payment with all the evidence they were happy with the work. Worst case scenario you write off your costs and keep the £200 anyway, but at least you're starting the negotiation from a stronger position.

We did exactly this and they said we were inflating the figures to try and keep the money! We're happy to take the hit on the amount over and above the £200 but the £200 deposit is proportionate and fair for the work our son has done already

Savvy_Sue

BTW I congratulate you on having clear t&c, signed contract etc. So many times there's just a verbal discussion, maybe a couple of emails, requests to do more and more, and a complete lack of clarity. 

And I agree, other trustees need to be aware and hopefully take action if there's misuse of charity funds. 

metropolis090

From what you describe, the situation seems quite clear. The contract was signed, the deposit is stated as non-refundable, and the work was actually carried out. The fact that the client did not provide content is not your responsibility. I don’t see why you should refund the money.