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YC S12 company refuses to pay for my design. "Send your claim to our legal team"

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Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#161

Post by capsule_toy »

javajosh wrote: post #113
damoncali wrote: post #79

Earlier quoted context omitted.

On the other hand, this is a vibrant case study for both inexperienced founders and freelancers about the importance of doing the boring shit right. Sign a contract. Set a price. Get paid. Make sure there is a meeting of the minds , as the lawyers like to say. This, right here, is exactly why we do these things.

While I agree this is a good learning experience, and so deserves some attention, we disagree on the lesson. The actual lesson, for the founder, is this: >>Verbal contracts are binding. You cannot legally agree to something on the phone and then change your mind when it comes time to sign the written form of the contract. Period.

I would think the written contract becomes a new agreement that supersedes the verbal one. What if there's a dispute in the terms of the written contract that was never brought up verbally?

I actually am looking for clarification b/c I would be interested in knowing if the prior verbal agreement trumps all future written discussions. It just isn't what I guess would be the case, and I can certainly see how someone would interpret being asked to sign a contract a renegotiation of terms, which is what I think happened in this case.

Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#162

Post by capsule_toy »

learc83 wrote: post #122
tptacek wrote: post #96

Earlier quoted context omitted.

Oral contracts are binding everywhere in the US. What's damaging to his reputation isn't pursuing the invoice based on an oral contract. What's damaging to his reputation is if he jumped the gun, whipping up drama about a receivable that he reasonably could have expected to get paid if he simply invoiced persistently. I suspect this thread might be a bit of a litmus test for people who have done a lot of freelancing.…

Just because it happens doesn't mean it's right. Yes companies drag out payment and make you jump through hoops to get paid (the you here is a hypothetical freelancer). The reason they do this is to hold on to your money as long as possible with the outside hope that you'll just go away and they get away with theft. It's bad enough with larger companies where the people you're working with may not actually be the peo…

I like how you assumed malice when bureaucracy is a much more plausible explanation.

Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#163

Post by learc83 »

capsule_toy wrote: post #162
learc83 wrote: post #122

Earlier quoted context omitted.

Just because it happens doesn't mean it's right. Yes companies drag out payment and make you jump through hoops to get paid (the you here is a hypothetical freelancer). The reason they do this is to hold on to your money as long as possible with the outside hope that you'll just go away and they get away with theft. It's bad enough with larger companies where the people you're working with may not actually be the peo…

I like how you assumed malice when bureaucracy is a much more plausible explanation.

I acknowledge that bureaucracy might be partly to blame in larger companies, but we are talking about a small company where the designer was dealing directly with the CEO.

Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#164

Post by tptacek »

learc83 wrote: post #163
capsule_toy wrote: post #162

Earlier quoted context omitted.

I like how you assumed malice when bureaucracy is a much more plausible explanation.

I acknowledge that bureaucracy might be partly to blame in larger companies, but we are talking about a small company where the designer was dealing directly with the CEO .

Again: are you familiar with the concept of "payment terms"? Has anything been disclosed to suggest that this vendor hasn't had timely payment? Are we all clear on what "timely" means in the context of freelancing?

Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#165

Post by tptacek »

Silhouette wrote: post #153
patio11 wrote: post #128

Without saying anything about this particular situation, can I just point out for the four hundredth time that $780 invoices generate far, far, far more stupidity than $7,800 or $78,000 invoices do? This is the fault of both people who send $780 invoices and people who generate work likely to cause $780 invoices. Many of you will be able to pick whether you are either of these types of people. I suggest being neither…

Without saying anything about this particular situation, can I just point out for the four hundredth time that $780 invoices generate far, far, far more stupidity than $7,800 or $78,000 invoices do? Your argument is a classic case of the correlation/causation fallacy. A modest invoice does not "generate" stupidity. Millions of freelancers around the world make a good living doing relatively small jobs for satisfied c…

I'm really not sure I see how you're able to get 4 paragraphs of objections from such a simple point.

We're talking about a $780 invoice. The invoice was generated before written contracts were completed because... it's a $780 invoice. The project was worth so little to the client and was so trivial to the vendor that it was able to commence with neither a full spec, nor a master agreement, nor a simple statement of work.

This isn't about "pick great clients"; it's about avoiding the rats nest of potential projects where there will always be a temptation to work under fly-by-night terms like this.

And once again, every time someone says "pick better clients", someone here has to come out of the woodwork to preach the gospel of the freelancer- who- makes- a- great- living- servicing- small- clients- and- we- can't- all- be- Patrick- Mckenzie. Well, with all due respect to my friend Patrick, but I have hung out with him many times and I can assure you he has not been bitten by any radioactive spider, at least so that I can perceive it. The guy built a bingo card generator --- a kind of Platonic minima for value derivable from software --- and parlayed it into his current business.

For cripes sake, you're on the same message board as he is; do what he did, get better clients. Stop complaining when people in very similar situations as you, or who started in very similar situations to you, tell you how to do better. Look at the advice you're getting: none of it involves kissing the ass of some financier at a VC firm. (1) Pick a specialization more narrow than "software development" so you're not competing on oDesk; (2) Segment your market so you can identify the most lucrative clients; (3) Tailor what you get good at to that market; (4) Be choosier; (5) Get paid. More.

Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#166

Post by prodigal_erik »

gscott wrote: post #131
_delirium wrote: post #19

I'm going to go out on a limb and register a slight discomfort with the increasing use of HN as a "court of public opinion" in very fact-bound disputes like this one. I can sort of see resorting to it out of desperation, but I'm afraid the Internet Lynch Mob has a very high ratio of outrage to effort spent actually investigating. This post has 84 upvotes in 21 minutes, which suggests a very quick investigation! So, t…

It is possible that people expect YC funded companies to have high moral integrity and that drives the posts when YC funded companies do things that are against this purposely built-up group of persons moral compasses.

Why? YC does not have an unblemished record of perceiving and rejecting scumbags. pg described airbnb as "among the nicest of the people we've funded" and yet: http://gawker.com/5853754/the-seedy-spammy-past-of-airbnbs-c...

I want to like them, but they aren't perfect, and they haven't made a big deal out of "not evil" in their positioning.

Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#168

Post by Silhouette »

tptacek wrote: post #165
Silhouette wrote: post #153

Earlier quoted context omitted.

Without saying anything about this particular situation, can I just point out for the four hundredth time that $780 invoices generate far, far, far more stupidity than $7,800 or $78,000 invoices do? Your argument is a classic case of the correlation/causation fallacy. A modest invoice does not "generate" stupidity. Millions of freelancers around the world make a good living doing relatively small jobs for satisfied c…

I'm really not sure I see how you're able to get 4 paragraphs of objections from such a simple point. We're talking about a $780 invoice. The invoice was generated before written contracts were completed because... it's a $780 invoice. The project was worth so little to the client and was so trivial to the vendor that it was able to commence with neither a full spec, nor a master agreement, nor a simple statement of…

I don't know whether English is your native language, Thomas, so perhaps that is the problem here. In any case, do you realise that you come across as extremely rude sometimes? In particular, you often seem to assume that others (me, in this particular case, but I've seen you do it to people before too) are not successful or do not know what we are talking about because we happen to disagree with you or someone you agree with. That is a very annoying habit, and it does nothing to promote interesting and informative discussions. I hope you will forgive my bluntness here, but you seem like a man who prefers honesty.

As it happens, I run multiple businesses today, one of which does work on bespoke projects for outside clients, and we do just fine with our calibre of clients and we send them invoices for a lot more than $1,000. In other words, I have no axe to grind here. But I don't see how that is relevant, really, anyway.

I simply objected to Patrick's characterisation of people who have problems with clients as being at fault themselves. I also object to the implication, which you seem to be making as well, that $780 is somehow a trivial amount of money and not worth bothering about, which is obviously not true for a lot of people out there particularly in the current economic climate.

It is not OK for someone to act unprofessionally, including not paying legitimate invoices within a reasonable period, regardless of the size of the deal. It would not be OK at $100,000. It would not be OK at $1,000. It would not be OK at $10. Whether or not it is worth involving lawyers as a practical matter has nothing to do with the ethics of the situation.

I therefore found the implication that someone new to the industry -- a position we were all in once -- somehow brought such poor behaviour upon themselves merely by taking on a relatively small job to be distasteful, the casual dismissal of the value of sub-$1,000 contracts to be rather conceited, and the whole post unnecessarily discouraging towards beginners who are taking their first steps into what often feels like a new and uncertain world.

Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#169

Post by tptacek »

Silhouette wrote: post #168
tptacek wrote: post #165

Earlier quoted context omitted.

I'm really not sure I see how you're able to get 4 paragraphs of objections from such a simple point. We're talking about a $780 invoice. The invoice was generated before written contracts were completed because... it's a $780 invoice. The project was worth so little to the client and was so trivial to the vendor that it was able to commence with neither a full spec, nor a master agreement, nor a simple statement of…

I don't know whether English is your native language, Thomas, so perhaps that is the problem here. In any case, do you realise that you come across as extremely rude sometimes? In particular, you often seem to assume that others (me, in this particular case, but I've seen you do it to people before too) are not successful or do not know what we are talking about because we happen to disagree with you or someone you a…

I am sorry that you are getting lumped in with a caricature of all the objections to this "pick better clients" message that exists mostly in my head. That's not fair.

But my points stand:

* It does not matter what you think is "OK" or "Not OK". Taking a month to pay an invoice is standard practice. Even if you negotiate Net-15 payment, it's standard practice: nobody pays on time. Complaining about a receivable when it has taken single-digit days to pay out is unprofessional.

* By working without a written contract, and in particular without any agreement as to how invoices will be paid, the freelancer has taken some of the responsibility for the payment drama.

* Choosing better clients, or (if it makes you feel better to say it this way) different kinds of projects to work on for clients, will produce better results for freelancers. If only because high-value projects almost never execute this carelessly.

* $780 is a trivial amount of money. Even for this person. By their own admission, we're talking about 12 billable hours. If you're a day and a half from bankruptcy, you're not ready to be working for yourself. Real clients will drag 9 months on invoices whether you think that's OK or "ethical". You can complain to them about it, or to the public, but you'll get paid on the same schedule either way, and you'll poison your reputation in the process.

Re: YC S12 company refuses to pay for my design. "Send your claim to our legal team"

#170

Post by rprasad »

alttab wrote: post #28
kika wrote: post #9

I don't understand this, people. They're YC funded, in the worst case they have how much now, 10k? Risk your reputation for a few hundred dollars, having a few thousand in the pocket, why?

They didn't sign anything, and the "CEO" of any YC startup early enough to need to outsource product development isn't promising anything despite their words.

Contracts do not have to be written. That's the first thing you learn the second week of law school.
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