Can a consulting firm charge you in full when the service agreement has been terminated?

Question

If a consulting company has quoted you a price for a service, and you send in the documentation required from your side to get the job done, and then you pull out of it (because you may have changed your mind) - can that consulting company still insist you pay them the full price they would have charged you for the whole job?

Answer 1

Hi Tahini,

You raise a very interesting question, with many multi-faceted marketing, ethical, and legal issues.

I'm not an attorney and I don't play one on TV :-).

BUT I can tell you that you should really RE-READ the service agreement that you signed very carefully to see what it says about termination clauses and liquidated damages.

Next if enough money is involved, I'd strongly recommend that you consult with an attorney in your local area.

More than likely, you should be able to negotiate a pro-rated compromise that makes both parties feel "whole".

For example, if the consulting firm budgeted the project based on 100 hours and the firm has only incurred 10 hours of time to date, a 10% settlement is probably reasonable... assuming the time can be reasonably documented.

Again though, if you're concerned:
a) reread the service agreement that you signed
b) consult a local attorney

Best,

Joshua Feinberg
Computer Consulting Support Contacts Secrets
http://www.computerconsultantssecrets.com/blog/index.php/category/computer-support-contracts/

PS: No one on Yahoo Answers should really be giving you legal advice.

Answer 2

What was in your signed agreement? Just because you changed your mind, it doesn't mean that you can walk away from a contractual agreement.

Answer 3

In my opinion, yes because you pulled out and they still met the pre-agreed requirements.