I cancelled a project before starting it, need advice on responsibility.
I'll try to make this long story as short as possible.
I work full time as a frontend web developer. In May of this year I signed a contract to design and develop a website for a client through a broker to help pay down student debt. I requested 25% up front, as well as 25% after acceptance of designs. Both invoices have been paid. The Project did not go smoothly with delays on both sides. Fortunately the project has completed, and I have invoiced the client for the remaining 50% less 5% for inconveniences along the way.
While the project was in development the broker asked me to quote another project (Project B) for the same client. This time the project involved conversion of a previously launched site from Expression Engine CMS to PyroCMS. I quoted a low figure as the broker had pressured me to give low quotes on the previous project (Project A). The client and broker accepted my low quote via email. No contracts were signed, and no deposits were requested. I figured we would deal with these details once Project A was complete.
Last week my day job signed a major new client and assigned me a heavy workload for the foreseeable future (several months). I made the difficult decision to back out of Project B as I do not believe I will be able to give both jobs the time necessary to complete them on time.
The broker, understandably, took this news poorly. He has let me know that he is looking for a replacement developer, but he has not been able to find anyone who will do it for less than 3.33 times the amount I quoted. He has also informed me that he plans to pay that difference using funds from the remaining invoice from Project A.
While I acknowledge that my actions are responsible for the current situation, I do want to know what my rights are in this case to make sure I do not give up more than I am obligated to.
My questions are:
Can he withhold funds from Project A if Project A's contract makes no mention of Project B?
Am I liable for the difference in costs?
If not, what are my liabilities?
For the record, this all involves American companies.
As for the practice itself, think of the following situation:
You are a Comcast TV customer and you just signed up for their internet. THey did not provide internet for the first month so you don't pay the internet bill. Does this give you the right to not pay the TV bill because they breached the internet one?
Without a contract you're going to have a hard time showing anything. But they have to pay for what they agreed to, your dispute on project B is an entirely different matter, especially if you've delivered the files. If they don't pay project A in full, don't give them a thing.
This is why it is important to have a contract that outlines how this stuff goes.