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Client refusing to pay $8,500 invoice - no signed contract, what are my options?

Started by FreelanceDesigner_Amy · Nov 15, 2024 · 10 replies
For informational purposes only. Collection laws vary by state. Consult a qualified professional.
FA
FreelanceDesigner_Amy OP

I'm losing sleep over this. Did a full brand identity project for a startup - logo, brand guidelines, website mockups, the works. We agreed on $8,500 over email and phone calls, but I never got them to sign an actual contract (I know, I know...).

Delivered everything 6 weeks ago. They loved it, used my logo on their pitch deck to investors, and now they're ghosting me on payment. Emails go unanswered, phone goes to voicemail.

Do I have any legal recourse without a signed contract? What are my options here?

RK
RKeller_Esq Attorney

Good news: you don't need a signed written contract to have an enforceable agreement. Oral contracts are generally enforceable, and email exchanges can constitute a written contract.

Key questions:

  • Do you have emails where they agreed to the $8,500 price?
  • Do you have emails showing they accepted/approved the deliverables?
  • Can you prove they're using your work (screenshots of their pitch deck, website, etc.)?

If yes to these, you likely have a strong case. The fact they're using your work is particularly helpful - it's hard to argue they didn't agree when they're actively using what you delivered.

VW
VeteranFreelancer_Will

Been through this twice in 15 years of freelancing. Here's the escalation ladder that worked for me:

  1. Polite reminder emails - You've done this, they're ghosting
  2. Phone call to a different person - Try reaching their CEO, CFO, or someone else at the company
  3. Formal demand letter - Sent via certified mail, stating amount owed and deadline (usually 10-14 days)
  4. Threat of collection agency / credit reporting - Mention in demand letter
  5. Small claims court - If under your state's limit (usually $5K-$10K)
  6. Actual lawsuit - If above small claims limit

The demand letter alone resolved both my situations. Something about official letterhead and "legal action" makes people suddenly find their checkbook.

FA
FreelanceDesigner_Amy OP

@RKeller_Esq - Yes! I have an email chain where the founder wrote "Sounds good, $8,500 for the full brand package works for us. Let's get started!" And later emails where they said "Love the logo!" and "Website mockups look great, exactly what we wanted."

@VeteranFreelancer_Will - I like the idea of a demand letter. Do I need a lawyer to write it, or can I do it myself? Any templates?

RK
RKeller_Esq Attorney

That email is gold - "Sounds good, $8,500 for the full brand package works for us" is clear acceptance of your offer. Combined with their approval emails and use of the work, you have a solid case.

On demand letters: You can write one yourself, but one on attorney letterhead carries more weight. Many attorneys will write a demand letter for $200-400 flat fee. Often worth it because the letter pays for itself when they actually pay.

If you want to DIY, check out the demand letter templates on this site. Make sure to include:

  • Specific amount owed
  • Description of services provided
  • Reference to their agreement (quote the email)
  • Clear deadline (10-14 days)
  • Consequences of non-payment (legal action, collection agency, credit reporting)

Send it certified mail with return receipt AND regular mail. Keep copies of everything.

JC
JC_Contractor

Jumping in because I'm a general contractor and we have an extra tool that might apply to some freelancers: mechanic's liens.

If you're a contractor, subcontractor, or supplier who improved real property (construction, renovation, etc.) and didn't get paid, you can file a mechanic's lien against the property. This clouds their title and they can't sell or refinance until it's resolved.

Doesn't apply to design work like Amy's situation, but for any contractors reading this thread - mechanic's liens are incredibly powerful. File them timely though - deadlines are strict (often 60-90 days from completion).

SC
SmallClaimsVet

I've been to small claims court 4 times for non-paying clients (3 wins, 1 settlement). Some tips:

Before you file:

  • Check your state's small claims limit - $8,500 is within most states' limits (CA is $12,500, TX is $20,000, NY is $10,000)
  • Make sure you file in the right jurisdiction (usually where defendant is located or where work was performed)
  • Filing fee is usually $30-100

In court:

  • Bring organized printouts of ALL emails - chronological order
  • Bring proof they're using your work (screenshots with dates)
  • Bring your invoices
  • Dress professionally, be calm and factual

Half the time, the defendant doesn't even show up and you win by default. The other half, they suddenly want to settle in the hallway before the hearing starts.

IP
IP_Designer_Kate

One thing nobody mentioned: copyright angle.

Without a signed contract transferring copyright, you still own the copyright to your designs. They're using your work without a license. You could:

  1. Send a DMCA takedown if they're using it on a website
  2. Threaten copyright infringement claims (which have statutory damages)
  3. Contact their investors if they used your logo in pitch materials without paying/licensing

This is a negotiating lever. "Pay the $8,500 you agreed to, or face additional copyright claims AND I'll inform your investors you're using unlicensed IP in your pitch materials."

I've seen founders suddenly find money real quick when their investors are mentioned.

FA
FreelanceDesigner_Amy OP

Wow, the copyright angle is something I hadn't considered. You're right - I never signed anything transferring rights. They're technically using my work without permission.

I'm going to:

  1. Draft a demand letter using the templates here
  2. Include the copyright angle - pay the agreed amount or face additional claims
  3. Give them 10 days
  4. If no response, file in small claims (I'm in Oregon, limit is $10,000)

Will update you all on how it goes.

RK
RKeller_Esq Attorney

Good plan. A few things to keep in mind on the copyright angle:

  • Copyright infringement is a federal claim - small claims court can't hear it
  • To get statutory damages, you'd need to register the copyright (you can do this now, but damages are limited if registration is after infringement)
  • So use it as leverage in your demand letter, but your actual lawsuit should probably be breach of contract in small claims

Also - document everything going forward. Screenshot their website, any social media showing your logo, any pitch deck pages you can find. If they try to claim they stopped using it, you want dated proof they were.

FA
FreelanceDesigner_Amy OP

UPDATE: It worked! Sent the demand letter via certified mail on Nov 20. On Nov 27 (day 7 of the 10-day deadline), I got a call from their COO. Lots of apologies about "miscommunication" and "cash flow issues" and "we always intended to pay."

They wired $8,500 plus $500 for my "patience and professionalism" the next day. I think the copyright language and mention of their investors spooked them.

Lessons learned:

  • ALWAYS get a signed contract upfront (never again)
  • Take deposits before starting work (50% minimum)
  • Demand letters really work - the formality and legal language gets attention
  • Know your leverage - copyright ownership was key here

Thanks everyone for the advice!

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