Tips on Freelancing: Penalties and Damage Control

First, here’s some new artwork I’ve done for a client working on a game inspired by Ace Attorney. I’ll stick the rest of them throughout the rest of the post to break it up a little. (Then the rest of the images are not client-related 😛 ) Thank you, Paul Nagami, for such a fun project!




Executing Penalties and Damage Control

A lot of the times, there is just nothing you can do to get your client to pay if they simply do not pay after you’ve done your part in the contract. But you can take precautions. Here are some tips.

  • In your contract, specify payment due dates
  • Specify penalties for late payments
  • Limit access to your deliverables
  • Withhold services accordingly

The penalty I use for late payments usually involves imposing fines or having the client give me down payments for any deliverable they’re requesting. This kind of makes the contract into a fixed-price contract, but you can always over-estimate the fixed price for the piece you’re providing the client and make that part of the penalty.

For limiting access to deliverables, what I do is put filters or water marks on my images, and/or shrink the image size, thus lowering the quality of the deliverable. I then notify the client that once I have received the full payment for that deliverable, I would only then provide them the final product.

And of course, on the last bullet point, your services should always be prioritized towards paying customers.

It’s important to enforce these rules strictly, otherwise you will be signaling to the client that you’re a push-over. I don’t consider myself to be that harsh. Clients only pay for the exact amount of hours I’ve worked, I’m pretty transparent about everything, and I give them at least a few days after the billing date to pay off their balance. Most of the time I only ask for down payments on the very rare occasion I take on fixed price contracts and when I’m enforcing penalties.


If and when any problems arise between you and your client, always remain professional and do not ever try to embarrass your client. Whether they’ve incurred delinquency in their payments or they are trying to cheapen your services or they start calling you names, you must think in terms of the next step instead of reacting personally.

In my experience so far though, most of the problems with my clients I’ve had could have been prevented by me not having taken on their projects in the first place. Perhaps I wasn’t so great at screening them before or I was too quick to take on projects that were “pseudo-hourly” but were actually fixed price. What I did was I thought of it as “Okay, fine, it’ll be fixed price but I won’t work more than a certain amount of hours to make sure my hourly rate doesn’t drop.” This is very risky, because clients easily took advantage of me this way. I was either desperate for clients at those times or just way too naive.

But after that damage is done, then when it comes down to the 500th revision on a fixed price contract, because you (or myself in this case) didn’t specify a limit to the amount of revisions in the contract, and the client is clearly taking advantage of you, you may want to speak up.

You basically have two options (or perhaps three). You either drag it out and do everything the client asks you to do at the risk of reducing your hourly rate down to the single digits per hour, or you terminate the contract. Option 3 could be re-negotiating the contract, though in my experience, I never really did well with that and ended up with option 2.


So now you want to terminate the contract. Most ideally this is done in amicable terms, but this isn’t super mandatory to me. I’d also advise that you never try to burn bridges when you can at least say something like “I’d love to work with you in the future if the opportunity arises.”

So far the best way for me to end contracts (they’re usually pretty short) is to give the client a full refund. This has so far definitely prevented my clients from giving me bad ratings on the freelancing sites.

One of my contracts that I terminated was a contingency contract. I’d never done one of these before. It involved my client having to deliver my work to one of his clients, though only through him. Thus, my success was contingent on satisfying the whims of his client. I learned after a few days of working on this contract that this was going to be extremely difficult for me, and in the end, kind of impossible. On top of that, it was another one of those fixed price contracts disguised as an hourly contract (strict budget). The biggest problem was the sheer amount of revisions required, and again, I did not specify a limit to the amount of revisions for the price.


(Basically, one great tip I have for you to prevent bad experiences is to always specify how many revisions you will make for the price being paid. If you are working on an hourly contract, always tell the client to expect revisions as needed and that they need to be paid for at the same rate.)

I could have explained to the client why I decided to terminate the contract, but one of my old clients (probably the best client I ever had) suggested that I keep everything strictly professional and to the point. Basically all I said was, “I am no longer working for you, you will receive a full refund.” I was pretty much screwing this client over by leaving him suddenly with unfinished work, but that was none of my concern.

So, in the bit of experience I have with clients I ended up terminated contracts with, I’ve learned that in overall negative situations:

  1. Remain professional at all times.
  2. Do not get personal with your client.
  3. Focus on only what’s necessary to terminate the contract.

So on the last point, basically just keep communication limited down to only what is necessary. If the client asks a bunch of questions, you really don’t need to answer them at all and you can ignore them. A lot of the times these questions will get you personally involved. I find it much easier and simpler to end things this way, even if it’s kind of a cold way of dealing with someone. I know others would choose a different approach, but in my experience, things just got too personal if I talked too much.


On just a quick little note, once your client is refunded, they shouldn’t be allowed to use your work for any purposes because they do not own your work any longer. So technically, if you find them breaking this rule, you can sue them if you really wanted to.

I hope you found this post helpful, and happy freelancing! 😀

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