When a Client Cancels a Project

So my typical work process includes visiting with the client and spec’ing out the project, I send them a proposal, they approve, then send an invoice which requires 50% down payment to order equipment.

This has worked well and most of my long-term clients I don’t even require the down payment anymore because risk is low.

However I’m curious how do others handle if the client pays the down payment, you order equipment, and then they cancel the project. Do you refund the money which means you’re stuck with the equipment, which sometimes can be specialized and not easy to resell.

I’m just curious how others handle this??

if the equipment can not be used elsewhere or returned they lose all or part of the down payment.

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Personally I sell equipment/hard costs as a separate transaction which requires full payment before I order to avoid this situation. If labor is a large amount I’ll usually break it out into milestones and invoice as I go. In your situation I agree with Tom and hopefully there is enough to cover your cost.

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