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I am owed money and my client wont pay

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ATV Cow
I am owed money and my client wont pay
on Jul 4, 2005 at 2:19:02 pm

Hey guys

this may be a long post, so please bear with me.

I work full time and run a small part time business doing wedding work, DVD conversions, graphic design etc. A colleague of my full time employment also runs a small produciton comp. on the side filming dance productions and the like.

They approached me and asked me to convert their 3 hours of material into a dual layered DVD and 500 copies. I sat down with her and gave her a price which she agreed on.She gave me a deadline when the discs needed to be in her hands and i gave her a time frame for when i needed all of her material to ensure her deadline. My first mistake is i did not write up a contract.

She failed to produce the material by my deadline and was infact 3 weeks late (which is documented in emails).Due to her lateness, i could not produce the DVD in the normal way (which involved over 20 hours of encoding, and rather i captured it in realtime with a realtime MPG2 board).I produced her DVD, however my computer broke down just before i could write it to a DLT machine. It then took a further 3 days to re-author and give to a company that could put it to DLT. this company also prepared a dual layered disc for checking before it went to press.

My client, who has many years in Television production for a major TV station, and knows that everything gets checked before it goes to the next stage, did not want to check the DVD, as she was in another state at that time, said that she thinks it will be ok wanted it to be sent away so it could get to Asia over the weekend. I must also mention that i did stress this checking in my timelines at the beginning of our relationship.

3 weeks later, my client picks up the 500 discs, and watches one with me. She is happy with the content however, does mention that on some scenes you can see the compression chuncks in the DVD. But apart from that, is happy.

She sends them out to her clients and 3 days later, gets a number of phonecalls from people saying that it skips in certain area and that it is out of sync. She relays this to me, and then tells me that she did notice a slight sync error when she watched it but didn't worry about it and sent the DVDs out anyway. The skipping she talks about can not be replicated on 5 DVD players, however i did find out that it is the change in layer that caused this and is not my fault. The out of sync, happens to be 3 frames out of sync, and originated in my realtime capture.

I explain all of this to the client and mention that had she of watched and checked this like she should have this may have been avoided. (But then again, she could have just missed it like she did the first time she checked it and it still would have been sent away with errors). She asks for a remedy. I suggest that due to our full time careers i was willing to meet her at half the cost to re-run them again, however that she would need to pay the first account in full first. She then commences a paper trail of communication and writes that i have admitted the error and that i must pay for them to be re-done at my cost. Again i suggest 50-50. She warns that should they not be in her hands by a certain date that she will get them redone herself and should the amount to have them redone be less than my invoice, she will fund me the difference. Again i suggest 50-50. OVer the next 3 months, i send letters of demand and threaten with legal action.

A month ago, i receive a cheque in the mail for $120. I then made contact with a debt collector and aksed them to chase them up. Which they do and receive a letter back from their lawyers saying that i have admitted to the fault, i failed to remedy the situation, the client lost the contract which is worth $10,500, and had the DVDs redone at a cost of $4000. Should this go to court, then they will defend themselves and counter sue for the lost contract and the cost to have them redone.

So i am now lost as to what to do. I need advice and i guess i need a lawyer, but what type of lawyer do i need? i know nothing about them.

I still dont have my original discs back including cases. I have not banked my cheque. I offered a remedy which they rejected so as i see it, not liable for consequential damages. She was well aware of the need to check the DVD before it left. She did when it came back and iether failed to pick up the lip sync error or she did and was not concerned about it.

Please anyone reading this, do i stand a chance if it goes to court?

Is there anyone in Sydney Australia that knows a good laywer?

CHeers
ATV



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Tim Kolb
Re: I am owed money and my client wont pay
on Jul 5, 2005 at 1:32:27 pm

Unfortunately, there are a variety of circumstances here.

The timeline was definitely a factor...in the beginning. The main defects present on the customer end are the audio sync and the runnability of the discs.

I don't understand the layer break point...did you send the DLT without a specified layer break point? Did the replication house use a different layer break point than you specified?

Apparently a person needs to familiar with the material to see a 3 frame sync drift? If someone is talking and their lips don't line up, you can make a case that the customer should have proofed it, but anyone on the outside looking in might ask if you had eyes, why you didn't spot it yourself. 3 frames is pretty visually obvious.

I have a feeling I know what kind of client this is...and I suspect they probably drive everyone they work with nuts. However, the issues with the DVD are workmanship-based and the client's deadline violation or lack of proofing has little to do with the issue if timely delivery or the content isn't the dispute, even if it was the original cause of your changing methods of attacking the task.

If there was no contract that said that the client declining a proof step releases you from ANY liability (and the runnability of the discs STILL wouldn't be covered as there is no way to judge that until the replication run shows up at the door...), I don't think that would help you much either.

I suspect the warnings you gave the client regarding deadlines were on the order of "I can make your deadline if you make mine." Unless you also warned your client that if they did not get you the material by the deadline, the workmanship and runnability of the resulting DVDs would not be your responsibility...I think you're basically stuck.

The only slight possibility here is that the replication house may hold some liability in the runnability of the discs...perhaps they might be willing to give you a discoun t on the replacement run?

I have no first hand experience with Australian business law, but it doesn't sound promising...sorry about that.






TimK,

Kolb Syverson Communications,
Creative Cow Host,
2004-2005 NAB Post Production Conference
Premiere Pro Technical Chair,
Author, "The Easy Guide to Premiere Pro" http://www.focalpress.com
"Premiere Pro Fast Track DVD Series" http://www.classondemand.net


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Mark Suszko
Re: I am owed money and my client wont pay
on Jul 5, 2005 at 5:07:45 pm

Hindsight as they say is 20/20.

Probably you should have terminated the original deal when she blew the first deadline(s), and asked for a whole new deal. Or walked away from a losing proposition at that point, knowing it would have led to compromises you shouldn't have to make.

Having said that, ATV, you probably have that same "gung-ho", go-to-any-lengths-to-make-an-impossible-deadline-attitude that I do. That probably most of us do. You WANT to be the hero. You want to be "Scotty" from Star trek, the technological miracle worker that always comes thru in the clutch, against impossible odds.

That sets you up for clients that want to make you the patsy. Like this one.

As Tim says, the deadlines are a separate issue, and had that been the only issue, you'd have had maybe some recourse. Likewise if the replicators made some error, again, you might have had some room to negotiate.

When you accepted the late, blown deadlines, took the production shortcut, and you let the 3-frame error creep in, uncaught and uncorrected, that's where you lost the high ground. Clients can be ignorant of technical limitations, or unreasonable, they can be fools, they can be unobservant at times, third parties can screw things up beyond your control, but that doesn't excuse you, the expert, from negligence in the parts directly under your responsibility. You can't pin the 3-frame error on anybody else, that much you admitted.

Stuff happens. I can say that I've joined you in that club a time or two. Not proud of it, and I like to think I learned from those unhappy times. Before, if I made a technical error, I'd try to adapt around it, and almost every time I did that, it wound up biting me in the butt because one element compounds problems with another, all the way up the chain. Eventually I'd paint myself into a corner, all because I tried to live with a bad element instead of taking a step back and re-doing it right. Nowadays, if I find I made a screw-up, I don't try to work around it any more, I get the cursing out of the way, call the wife to tell her not to hold dinner, get some fresh jolt cola and start over again right.

At this point, considering the weakness of your position, I would look to find an arbitrator instead of a lawyer. This client looks like she holds all the advantages, so the best I think you can hope for is a negotiated surrender so you can get this behind you and rebuild. Hopefully arbitration will negotiate down the damages to something you can handle.

If there is a moral to the story, I would suggest it's this: get stuff in writing up front, get paid in installments as you progress, so if you have to terminate before completion, you at least are not out (lots of) money, and if you set a drop-dead date for getting all the elements you need to complete the job, stick to that, be prepared to abort the whole thing rather than push a bad position. As you have unfortunately discovered, clients don't have sympathy for you if you try "heroic measures" and fail. The trick is not to get yourself into the position where heroic measures are the only option.

Best of luck to you, let us know what happened when it's all over.



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ATV Cow
Re: I am owed money and my client wont pay
on Jul 5, 2005 at 9:46:17 pm

"why you didn't spot it yourself. 3 frames is pretty visually obvious."

Yes you are correct. Three frames can be quite obvious, however the production that i was doing was a dance production, no talking required. The area that was used to find the out-of-sync was a section towards the end where some of the dancers lyp sync to a song. So unfortunately, when i did my checks to see the links worked on the menu, quality and the like, i failed to check the only part of the dvd that i could check sync issues.

Am i still entitled to return of the faulty goods then if she still hasn't paid for them? I maight be able to do a deal with the replicator and send the cases back? If if am, how should i go about obtaining them.. an arbitrator or lawyer.

Thanks to you both for your valid opinions.

ATV


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Tim Kolb
Re: I am owed money and my client wont pay
on Jul 5, 2005 at 10:59:47 pm

I don't think there's anything wrong with asking for the defective product back as a condition of replacing the media.



TimK,

Kolb Syverson Communications,
Creative Cow Host,
2004-2005 NAB Post Production Conference
Premiere Pro Technical Chair,
Author, "The Easy Guide to Premiere Pro" http://www.focalpress.com
"Premiere Pro Fast Track DVD Series" http://www.classondemand.net


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ATV Cow
Re: I am owed money and my client wont pay
on Jul 5, 2005 at 11:20:47 pm

Hi Tim

The client has already re-done the job by another DVD company. I just wanted to know if i havn't been paid for the job, do i stand a chance of getting the cases back?

Cheers
ATV


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Tim Kolb
Re: I am owed money and my client wont pay
on Jul 6, 2005 at 3:08:10 am

I still would think you'd be within your rights to demand the product back if they aren't going to pay for them, yes.

Anybody have a different angle on that one?




TimK,

Kolb Syverson Communications,
Creative Cow Host,
2004-2005 NAB Post Production Conference
Premiere Pro Technical Chair,
Author, "The Easy Guide to Premiere Pro" http://www.focalpress.com
"Premiere Pro Fast Track DVD Series" http://www.classondemand.net


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Mark Suszko
Re: I am owed money and my client wont pay
on Jul 6, 2005 at 6:22:04 am

If they (the flawed DvD's) are not good enough to give to her customers, she has no reason to hold onto them, especially if she didn't pay for them. If she's holding them and giving them out to clients, even if they are sub-standard, then they are good enough for her to pay for, maybe not full value, but some amount. This is one of the things an arbitrator could handle, perhaps better than a court. Certainly faster. You will want to ask how many of the 'defective' units she has given out. Hopefully she was sloppy as well as greedy and gave out a significant number, even after the quality problem came out. Your position is pretty weak, but that issue could be to your advantage when arbitrating or going to small claims.

Though you have no paper contract, there may be the legal concept of "consideration" working in your favor. I was able to use this concept in winning a small claims case against a client that made extra dubs of our product on the sly but didn't pay us our agreed per-unit cut for the "secret" dubs. Scumbag claimed our contract wasn't valid, because he hadn't really agreed to it, but we were able to show thru paperwork, copies of the checks, etc. that he'd paid us at least a token amount, which made the contract binding and official. I got the tip, not from a lawyer, but an episode of the TV version of "The Paper Chase". - I know!- But damn if it didn't prove to be exactly true for our case. Apparently it's one of the basic measuring standards of if a contract exists or not. And they say TV isn't educational!;-)

So she gave you some kind of partial "consideration" payment (the uncashed check). She accepted the goods but did not pay the full amount. This is the best bargaining chip I can think of. I would use it to get the bad dub run back so you can salvage the costs of the cases, and to negotiate a differential on the costs for the extra re-done runs. I would charge her full price for each DVD dub of your bad batch that she gave away after the initial problem surfaced, and charge zero for the returned copies (which you are going to re-cycle to get a small amount back). I think you are still going to eat most of the costs of making this thing good, no way around that. I'm sorry.

I think arbitration is the way to go if you can't wait to get this behind you. Going thru the courts, even small claims, will take many months if not years to sort out. Least it seemingly works that way in the US, I don't know about Oz. Also, I can smell from here that you and this woman simply do not get along, so it's better you work thru an intermediary anyhow.

I know you're down about this, this is a story that always cheers me up after I screw-up:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

New exec, working for a huge corporation, gets a brainwave for a new product. He works up the marketing, everything, gets a green light from the bosses, a budget of a million dollars, and launches the great new idea into the marketplace...
where it sinks like a rock.

That Friday, he gets a message to meet with the CEO first thing Monday. He's a wreck all weekend, brings empty cardboard boxes with him Monday.

Meeting time. The carpet is strangely compelling in the CEO's office.

The CEO does not yell, does not curse.

The CEO asks questions. Many, many questions, about every aspect of the idea, and it's execution. The CEO asks the exec where the mistakes were made, what he could have done differently, how this could be played out better the next time. Then finally, abruptly, the meeting is over, the CEO says "that will be all".

"I, um, excuse me, but..."

"But WHAT?"

"Aren't you going to fire me now?"

"FIRE you!?!?!? I just spent a million dollars **TRAINING** you!!!!!!! Get out there and earn it BACK!!!

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

(so, you know, whatever doesn't kill us makes us stronger, at least if we can learn something from it.)



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