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Client refused to pay, breached contract after app is developed, just before delivery

(TLPR - Too Long Please Read) So, we’re a fairly new startup from India, developing apps and websites for clients. We’ve been working on this app with another Indian client who has suddenly called it quit without giving a solid, major reason.

The Original Contract (and some changes later on)

We will build a Android & iOS App for our client along with an Admin Panel. We will first go ahead with the Android app and when it is almost finished then we begin working on iOS app and Admin Panel. Client paid 20% in the start however we asked for 30 and the next payment was due in December which he said will make in January when the app is finished. We agreed to it. Client mentioned nothing about source code and discussed taking AMC (Annual Maintenance) from us several times.

The App

I cannot go into details for obvious reasons, however the app’s idea sounded initially good, it later on became very clumsy and complex due to Client’s irrelevant demands and when we told him that doing this or that will affect the UX badly he kept disagreeing. He has requested a lot of changes in the app from the initial scope and has taken it to a level when an app is in the market for a few years like 5. It is a full fledged app with annoying options and filters on all screens including Home, Search and Create Post. For ex: to create a post, you have to go through 4 screens, with a list of options to publish it. Login/Signup process continues for 5 screens. It’s a pathetic app from user’s perspective.

The Client

Not good. Actually very bad. Worst I’ve experienced all my life.

What have we worked on

We have finished the Android app upto 95% and is ready be delivered. iOS is in its starting stages with its login/signup flow complete. Admin panel has been designed but not working as of now.

Who has what?

We have the backend with us and the source code. They have the API doc, ER Diagram, an .apk and .ipa released on App Store. They also have all the design screens with them, all of it.

The Current Situation

The client recently met a tech co-founder who is also a very cunning guy and lies to the client about us and the app. He pushes him all the time to take extreme actions against us and be rude, even when we’re on a conference call. Now that the app is almost done, he asked for the ER diagram, API doc and Source code. I gave him the ER diagram, API doc but told him that the Source code is not free and that he has to pay for the added changes as well. On call he fought, shouted but later agreed and when I mailed him the same thing that this is how much you have to pay including for Source code, Admin Panel and Added changes he said to call it quit.

Me and my team have been working on the app for months and have completed Andorid 95%, iOS 15% and Admin panel 40% and now we are not getting paid for it. Being a startup the team was looking upto this project to get money from finally after so many months. But we’ve been screwed. The team who has worked their a** off without any money hoping to be paid, is now heartbroken and I feel really bad and am very angry at the client. The major reason for this is what I believe is his rat tech co-founder who wants to take the app under his name.

What are my options?

  1. Should I write a mail to him explaining how we have worked so hard and how he should not do this to another startup, waiting the crucial, growing time of theirs. I want to be firm, do not want to beg.
  2. Can I change a few things in the application here and there and publish it on the play store? Will there be any legal obligations to this? If I do this, I want to let my client know that I’m going to do this, does it sound like a good idea?
  3. I either want money in exchange for this app (as in someone who acts as the client and takes the app in exchange for money) or I will run it as my own product with the same underlying features as sent in by the client. Can there be a legal case of Intellectual Property here?
  4. Is there any other option? Please suggest. Thanks in Advance.

Answer 12025

It totally depends on what legal bindings you have with the client. If there is any “out of the box” feature in the system, I cannot confirm on that. But, apart from that, your best bet would be to whitelabel the solution and try to run it as your own product.

OR

You can see if any other client has a requirement like this and you can reuse the system there. Of course there will be tweaks and modifications, but at least you will be paid.

Then again, check the legalities you have with the client once.


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