Work order money refund : Freelancing with an college friend

Is it a lot of money? What are we talking about here? Did you already buy a lambo? Give the money back. Stay friends. Friendship is more important than money. Sounds like there could be more work in the future from this relationship. Lesson learned. Next time will be a better process.

What I´d do in your situation.

1. Compile a List of all work done on this project by you. If you have a agreed upon rate, multiply by this. If not, find out whats common for this kind of work in your area and use that rate.

2. Offer to your client to settle the contract for that sum if both sides agree to having no further claims against each other. Provide them with the proof of your work and all its results (planning documents etc.) Give them an invoice for the work done and pay back the rest, if any.

I can´t see you legally just keeping money from someone for work not done (IANAL, though) unless you have a contract stating otherwise.

From now on: If you encounter a client, after initial contract, provide them with your base hourly rate and basic terms of business immediately and state clearly that these terms are applicable for all work you do until agreed otherwise in writing.

Also, start thinking about your own risk management. You are not an employee, and all the employee protection laws do not apply for you. Your hourly rate should factor this in. You need to pay for your own health insurance (with daily allowance for longer sick periods), retirement plan, disability insurance, ... and set aside a fund for quiet times as a from of "unemployment" insurance.

What I like to do when I am in a planning phase with a client: I invoice them for my time helping them to write the requirements with an hourly rate. Once the requirements are clear I can give them an estimate. If they don´t like it, they can look for someone else to do the project and I keep my planning money. If they book the project with me, I give them a discount on the planning costs.

I recommend staying stiff, if you feel that you have justified for what was paid(25% as you said), then go for a formal meeting and discuss your efforts against money paid. But be honest !! This is just the beginning of your life into this profession where you would meet much such money-minded individuals/organization. As you have not signed the contract and also you have not taken the complete payment, so it becomes justifiable to justify your efforts. If you learn to bend now, remember you will always bend !! But never ever forget your Honesty !!

Since you specify:

• No contract was signed
• Everything was verbal
• You received an advance
• You haven't completed work

I would suggest giving the money back, and attempt to save your college friendship.

If you want to do the project anyways, sign a contract that both you and the client (notice I call the person you're dealing with "client", not "friend" here) agree to. That contract should stipulate everything relating to payments, mentioning a Scope of Work.

The Scope of Work should be a separate document listing goals and milestones to be completed. This will get signed as well by both parties.

From now on, no more favours to friends or old acquaintances. Always have a contract, scope of work, and a deposit or advance BEFORE any work starts