I designed a website for my friend who found the client. I purchased the web hosting, domain name under my personal godaddy account. My friend who was also my partner was supposed to pay me $5,000 however, he only paid me $3,000 and is refusing to pay me the remaining compensation we had agreed upon. We never had ANY contractual agreement. I always just trusted his word, since at the time, he was a closes family friend. Now both he and the client are demanding that I transfer over all assets otherwise, I will be sued for extortion. I told my friend that if he pays what he had promised to pay (both verbally as well as in emails) I will gladly transfer everything and release ownership of the website, hosting and domain name - which I am still paying monthly hosting fees for. However he is refusing to pay me. So what should I do? And what are my rights as a Graphic and Web Designer who worked on this project without a contract?
I don't believe your friend has a case for civil extortion. He may, however, have a case for breach of contract.
The problem is that nothing is in writing , so it will be his word against yours. He will have a difficult time proving that he (or his company) is the rightful owner of the web hosting, domain, etc. and you will have a difficult time proving that he agreed to pay you $5,000 instead of $3,000.
If you cannot work out a deal with him exchanging the website, hosting and domain name for the balance of payment, I advise you to speak with a local business attorney to further ascertain your rights and obligations.
You claim that your friend was also your former partner - I don't know how that factored into this matter, but I will assume that you didn't have a written partnership agreement (or similar document) that explicitly detailed your duties to the company.
Going forward, make sure everything is in writing.
Best of luck.
The foregoing discussion does not establish an attorney-client relationship, is qualified by the limited facts presented above, and should not be relied upon as legal advice. To obtain definitive legal advice upon which one can rely necessitates retaining an attorney who is qualified in this particular area of the law. Any comments are merely suggestions for you to think about in discussing your situation with your local attorney.
Your facts do not appear to make out a case of extortion. Rather, you have a contract dispute without a written contract, so the difficulty on both sides will be proving the terms of the agreement. You will need to establish the agreed-upon price for your services as well as the right to withhold transfer before payment in full for your services. You should consult with an experienced Business Attorney to discuss your situation.
The foregoing discussion does not establish an attorney-client relationship, is qualified by the limited facts presented above, and should not be relied upon as legal advice. To obtain definitive legal advice upon which one can rely necessitates retaining an attorney who is qualified in this particular area of the law.
There is no such concept as "civil extortion." That is a very good indication that they are just blowing a lot of smoke. We always advise a written contract for development services, but in this case, it may benefit you not to have one. Under the Copyright Act, any work you create belongs to you unless it is assigned. Though, case law has established that your client would have a license to use it, if they paid for the work. While you say there is no written contract, you should be aware that correspondence via e-mail about the project will constitute a contract. If they did sue you for breach of contract, they would have to establish the terms of the agreement, and you would then counter-sue for the unpaid balance.
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