As your business grows, you’re inevitably going to come across a client or two whose personality doesn’t quite compliment you or your business approach, resulting in an inevitable break-up. It’s easier to segregate your offerings from these clients if you provide a product or one time service, but if you have a contract for an extended service, you must absolutely include an escape clause. Failing to do so can be detrimental to your business (and even your client).
The Non-Contractual Refusal of Service
Before we delve into the logistics of an escape clause, I wanted to mention the right way to handle things if you have an incompatible client or customer and no contract to worry about.
Before you do anything, complete any pending service projects (such as a landscaping job) or transactions you’re in the middle of with the client (she ordered a stock pile of products and they haven’t shipped yet). You certainly don’t want to leave clients hanging and create a situation that will harm your business.
Then, the next time that particular client or customer comes to you for more work, you can take one of two approaches:
“Sorry, my schedule is full.” – This approach is better suited to those individuals who don’t handle conflict well. Simply tell her you don’t have any current availability for her.
“Honestly, I don’t think this is working out.” – Those that are more daring can take the lay-it-all-on-the-table approach. Politely and with sympathy, inform him that, while you appreciate his business, you don’t think your personalities mesh very well and it would be best for everyone if he found a different provider. Be prepared, however, for one of three main reactions:
- Offended – Your comments, no matter how thoughtfully presented, may come off as an insult to someone that is already insecure, and this usually shows itself in an angry reaction.
- Indifferent – The client may completely agree with your assessment of the business relationship and, while pleased overall with your work, concede that it is best if you go your separate ways.
- Cooperative – He may either agree that he’s been difficult or admit he had no idea. Either way, this client will want to work to better your business relationship and may warrant a second chance.
CYA with an Escape Clause in Your Service Contract
If you have service contracts with your clients, then you absolutely must provide both of you a way out of it. Potential clients should understand this provision, since you never really know how things are going to work out when you start a new business relationship. Truth is, however, any potential client that rears his head about something of this magnitude is probably not someone you want to be working with anyway.
Have an attorney help you draw up a service contract template to use with all clients. Just make sure these elements are part of your escape clause:
In Writing — The severance of the business relationship by either party must be put in writing, with about two weeks notice of the date that ties are cut. This gives everyone a chance to finish things up, if needed, and protects you if the client tries to come back and say you just walked away and left her scrambling to find someone else.
Payments Owed — Put something in it about pending payments – as in, any funds owed to you must be paid immediately upon the severance of the business relationship (providing all pending work is finished, of course). However, if your contract requires a deposit and then periodic payments throughout the project, then you won’t really have any right to claim any unpaid funds if you choose to back out before the project is complete.
Workload — Depending on your own preferences, you may want to state that all mid-stream projects will be completed before the severance of a contractual agreement can fully take effect. However, this statement is typically reserved for contracts that are for many small projects (such as writing several articles over an extended period or providing lawn services at regular intervals), rather than one large project with several progressive deadlines (such as a website design). In other words, you’ll write the article you started for the client or cut the grass one more time, but then you’re done.
Breach of Contract – Don’t Do It
Be sure that, if you want to quit a contractual business relationship, you’re not breaching the contract by doing so. This is most common in B2B service relationships when your client provided the contract and you’re not totally familiar with its provisions.
And, if you signed a contract that did not have an escape clause included in it, you cannot walk away from the contract until the project is complete or the stated expiration date. In other words, if your contract says that you’ll provide six months of services to a client and you’re ready to walk at two months, but there’s no provision in the contract for doing so, you have to tough it out. Otherwise, the client can easily sue you for breach of contract, squeezing money out of you for “loss of income.”
Better Safe Than Sued
It’s best for all involved to be on the safe side and write up a means to easily walk away from an extended service contract with no hurt feelings or court dates to follow. When you finally come across the client that’s impossible to please, you’ll be glad for it.
(Originally posted on Ink’d Content)