Vent: can I bill the deposit? is ruining my life

I run a small web development shop. A client approached us in January for a website rebuild. We scoped the project idk, wrote a detailed Statement of Work, and they signed it on February 3rd. The SOW clearly states that a $5,000 deposit is due within 7 days of signing and that work begins upon receipt of the deposit.

They never paid the deposit. I sent two follow-up emails and left a voicemail. Complete radio silence for three weeks now. Meanwhile, I blocked out time on my schedule for their project and turned away another potential client.

My question: can I invoice them for the $5,000 deposit even though they never paid it and we never started work? The SOW is signed by both parties.

The answer depends on the specific language of your SOW. There are two common ways deposit clauses are structured:

Option A: “A deposit of $5,000 is due within 7 days of signing. Work begins upon receipt of deposit.” This creates an obligation to pay the deposit upon signing. The fact that work has not started does not excuse the payment obligation — the triggering event was the signing, not the commencement of work.

Option B: “Client shall pay a $5,000 deposit before work begins. This agreement is contingent upon receipt of deposit.” This makes the deposit a condition precedent. If the deposit is never paid, the contract arguably never became effective.

If your SOW reads like Option A, you have a binding obligation and the client owes you $5,000. Send a formal demand letter with a 10-day deadline to pay. You can find templates and guidance at /Demand-Letters/Business/breach-of-contract-demand-letters.html. If they do not pay, you can pursue the claim in small claims court (if under your state’s limit) or file a civil suit.

You may also have a claim for consequential damages if you can document that you turned away other work in reliance on their contract. Keep records of the other client you declined.

I just re-read the SOW. It says: “Client agrees to pay a non-refundable project deposit of $5,000 USD within seven (7) business days of the Effective Date. The Effective Date is the date of the last signature below.” Then separately: “Developer will commence work within five (5) business days of receiving the deposit.”

So it sounds like Option A? The deposit is an obligation triggered by signing, and work commencement is a separate step triggered by deposit receipt?

Yes, that is Option A. The phrase “Client agrees to pay” creates a contractual obligation to pay the deposit. It is not conditional — it is a promise to pay by a specific date. The work commencement clause is a separate operational provision. The non-refundable language further supports the interpretation that the deposit is earned upon signing, not upon performance.

Send the demand letter. Be professional, cite the specific contract language, attach a copy of the signed SOW, and give them 10 business days. If they do not respond, you have a straightforward breach of contract claim.

Fwiw i have been in this situation twice. Both times a demand letter got a response within a week. People ghost because they assume there are no consequences. A formal letter on letterhead (or from a lawyer) reminds them that a signed contract is legally binding.

One of my clients paid the full deposit after the demand letter. The other negotiated down to $3,000 which I accepted because I did not want to deal with court. Either way, the demand letter is the right first step.

Going forward, I would suggest restructuring your process so the deposit is collected before or at the time of signing, not after. We use a tool that generates the SOW and payment link together. The client signs and pays in the same workflow. It eliminates the ghost-after-signing problem entirely.

Also, include a late payment clause. Something like “If deposit is not received within the 7-day period, a late fee of 1.5% per month applies and Developer reserves the right to cancel the agreement.” This gives you an exit if they stall and a financial incentive for them to pay on time.