Client not paying, should I withhold code transfer?

[yasockie]

Hi.

So I had reservations for that particular client for quite a while, hence I negotiated 7 day payment terms.
The have been late every single time, I now have been paid twice, have one overdue invoice, and I will send the final one tomorrow.
I think they have run out of money and they have asked to suspend work for two weeks, I have asked for a formal notice which they sent.
My concern is that they now have no intention of resuming work or paying as I have completed a sizeable chunk of software.
They haven't received this weeks code changes yes.
The contract is on time and material basis and does not cover the details of handling the code over in any detail.
Should I withhold the code transfer until I receive the money?
What are my options besides Small Claims Court if I don't?

[doomage]

I would say, your chances of getting paid if you hand over the code are slim.

The chances of getting paid if you withhold the code are zero (don't know this for sure, but it's what I'd base any decisions on).

Are there any IP issues? Obviously you wrote reusable code...

[garethevans1986]

Any chance of you either sending them the compiled (obfuscated code so they can't decompile easily) or put a time bomb in?

GE

[yasockie]

Any chance of you either sending them the compiled (obfuscated code so they can't decompile easily) or put a time bomb in?

GE

Great advice, with that, they probably get me sued?

[yasockie]

I would say, your chances of getting paid if you hand over the code are slim.

The chances of getting paid if you withhold the code are zero (don't know this for sure, but it's what I'd base any decisions on).

Are there any IP issues? Obviously you wrote reusable code...

I find it hard to think like that client, to assume that perspective, as they often say contradictory things in one sentence etc.
Is there any other way I could phrase this to the client so that they see this is in a positive light?
For example: if I receive my final invoice on time I will provide you with critical bugfixes at no extra charge?

[Willapp]

There's a saying that "possession is 9/10th's of the law", or in other words once you've handed over the code, what leverage do you have to ensure payment? Even if you go down the small claims route there are no guarantees of receiving the money (trust me, I've been there) and if that happens do you really want to give them the satisfaction of knowing they got your hard work for free?

I say hold onto the code and inform them (in writing) that they have breached the terms of the contract due to non-payment of your invoices and you will not be turning over any further work until all outstanding invoices are settled in full. At least then you're in the driving seat and they would have to go legal if they think there is a case for you to hand over the code without them paying for it.

[Willapp]

Is there any other way I could phrase this to the client so that they see this is in a positive light?

If you want to try the gentle approach first, I say send them an email (or letter, recorded delivery) reminding them of your outstanding invoices and leave it at that - don't mention handing over the code but don't give it to them. If they wonder where the code is, let them chase you for it and then you can reply that you can't hand over the code until payment is sorted.

[yasockie]

If you want to try the gentle approach first, I say send them an email (or letter, recorded delivery) reminding them of your outstanding invoices and leave it at that - don't mention handing over the code but don't give it to them. If they wonder where the code is, let them chase you for it and then you can reply that you can't hand over the code until payment is sorted.

I've been doing those gentle reminders with all the previous invoices - like I said they haven't paid on time a single time using various excuses.
Since I have very little to lose, I want to flip it around now...

[moggy]

I've been doing those gentle reminders with all the previous invoices - like I said they haven't paid on time a single time using various excuses.
Since I have very little to lose, I want to flip it around now...

Just expalin it to them then, be honest and up front. You haven't paid on time yet and to be honest I have become a little nervous about having my invoices paid.

[northernladuk]

Just expalin it to them then, be honest and up front. You haven't paid on time yet and to be honest I have become a little nervous about having my invoices paid.

Let's be clear here. So far they have been late. Happens a lot, and most cases are paid and everyone goes there own way. A few are not paid whatever the op does. So.. you put your code in as normal and chase them for payment starting gently and then with interest and so on till you get paid. Nothing so far actually says you won't get it. If you don't put the code in you definitely won't get paid. The only other option is if you put it and the can't pay. If that is the case you wI'll never get the money whatever you do if you get my meaning. Whether you deliver or not you won't get paid.

All this said I cannot see an argument for not completing. If they can't pay what does it matter what you do with code. You have already done the work so stick it in and get the moral highground and a chance to get paid. Withholding it is a sure way to nothing surely.

Do the work, stick invoice in and start Dunning I say.