A client cancels midway through

"Actually, we're not going to go ahead with the project."

You are forty per cent in. There is a deposit paid, work done, and a conversation nobody enjoys having.

The first thing to do is not to reply straight away. Both reflexes are expensive: being accommodating immediately loses the money, being firm immediately loses the relationship and usually the money anyway. Let a few hours pass and start by understanding.

Why they are cancelling, and the three answers

The project has been cancelled on their side

Budget cut, the partner left, the launch pushed back a year, the premises fell through. It has nothing to do with you and there is nothing about the project to save.

This is the commonest case and the one where behaving well actually pays: a project cancelled for an external reason often comes back, six or eighteen months later, and it comes back to whoever did not make a scene. Settle the account properly and say you will be around.

They have changed their mind about you

Rarer than fear suggests, but it happens. Ask the question, once, straightforwardly: "was there anything in what we did that wasn't working for you?"

You learn something either way. Either they tell you what was wrong, which is expensive but useful. Or they assure you there was nothing, and you are in the first case.

They no longer have the money

Different from the first: the project still exists, the funding has gone.

Here, a pause is better than a cancellation for both of you, and you are the one who has to suggest it, because the client will not dare. A pause with a restart date, even a rough one, keeps the work alive and avoids the account altogether. See below.

What you keep, and why the wording matters

Most quotes describe a deposit in a way that has no consequence at all until somebody cancels, and a great deal of consequence that day.

The distinction to look up in your own jurisdiction is between a payment on a firm order and a payment that leaves either side free to withdraw by forfeiting it. They are different things with different names, and most people write the first while meaning the second.

Check what applies to your situation before relying on this paragraph: this article is not legal advice, the rules differ by country and by the kind of contract, and a consumer client does not have the same protections as a business one.

The practical principle, whatever the wording

What has been done is owed. Not the whole quote, and not nothing.

Almost everybody finds that fair when it is put that way, including the client doing the cancelling. What causes trouble is never the principle, it is how it gets announced.

So do not announce it: invoice it. A closing account, in four lines:

• the items actually completed, one per line, with their amounts;
• the total;
• what has already been paid;
• the balance, to be paid or refunded.

Here is why that is the only good way to do it: a client who reads "I'm keeping the deposit" feels punished. The same client reading four items, a total and a subtraction is reading an invoice, and an invoice is not a punishment. It is exactly the same sum and it is not the same conversation.

And if the account comes to less than what was paid, refund the difference without being asked. It costs little and it is what they will remember.

What you hand over

The uncomfortable question, and a clear position beats hesitation.

Hand over what has been paid for, in the state it is in, saying plainly that it is not finished. Withholding paid work to punish a cancellation is the one move in this article that guarantees a bad memory in somebody who will talk about you.

Do not hand over more than has been paid for. Not the sources if they were not in the quote, not the elements of an unbilled stage. It is the same boundary as in a client comes back six months later, and it is easier to hold if it was written down beforehand.

The two lines to put in the quote

Beforehand, while everything is fine and nobody is thinking about it:

The 30% deposit is due on order and is not refundable on cancellation. If the job stops partway through, the items completed at that date are invoiced, with the deposit deducted.

Those two sentences turn a dispute into a clause. The difference is not legal, it is human: a rule read at signing is a rule accepted, the same rule announced at cancellation is bad news, and bad news gets argued with.

On the rest of what belongs in there: what a freelance quote needs.

Offer the pause

The most underused option, and often the one the client wanted without knowing how to ask.

We could also pause rather than stop. I'll keep the work as it is, we pick it up whenever you want, and we take stock again in January.

Two conditions for it to be a pause rather than a cancellation that drags: a date, even an approximate one, and the work done either invoiced or already covered by the deposit. A pause with no date is a job asleep in your list for eight months while looking alive.

If the closing account goes unpaid

It happens, and it is a special case of the same mechanics: a client who has just cancelled has fewer reasons to pay than one waiting for a delivery, since they are no longer waiting for anything.

The sequence is the usual one, and the three chases work just as well: an unpaid invoice, the three chases. With one addition: the neutral first chase matters even more here, because there is a good chance the invoice simply got lost behind the emotion of the conversation.

Frequently asked questions

Is a deposit refundable if the client cancels?

It depends on what your quote says and on the framework that applies, and the wording matters: a payment on a firm order and a payment that lets either side withdraw by forfeiting it are different things. Most people write the first while meaning the second. Check what applies where you are; this is not legal advice.

What should you invoice when a client stops a job partway?

The items actually completed, neither the whole quote nor nothing. And invoice them rather than announcing them: a client who reads "I'm keeping the deposit" feels punished, the same client reading four items, a total and a subtraction is reading an invoice.

Should you hand over work already done to a client who cancels?

Yes, whatever has been paid for, in the state it is in, saying plainly it is unfinished. Withholding paid work to punish a cancellation is the one move that guarantees a bad memory in somebody who will talk about you.

How do you protect yourself from a cancellation before it happens?

Two sentences in the quote: the deposit is not refundable, and if the job stops the completed items are invoiced with the deposit deducted. A rule read at signing is accepted; the same rule announced at cancellation gets argued with.

Should you suggest a pause instead of a cancellation?

Often yes, and it is frequently what the client wanted without daring to ask, especially when the funding rather than the project has gone. Two conditions: a restart date even a rough one, and the work done already invoiced or covered.