Why does nobody talk about adding a clawback clause to your contracts?

I had a client cancel 3 months into a 6 month retainer and I was out $2,400 until I added a clause that lets me keep 50% if they bail early. Has anyone else tried this and had it hold up in small claims?

3 comments

3 Comments

kimblack1mo ago

Are you SURE you want to actually get lawyers involved over a few thousand bucks? lol. I put in a similar clause after getting burned on a 3 month project where the client just STOPPED answering emails. Look, small claims court judges have seen it all, they're not stupid. If your clause is clear and you can show the client agreed to it in writing, it's usually going to hold up fine. But just a heads up, don't put something crazy in there like keeping 100% or they'll throw it out for being unfair. A 50% clawback on the remaining months is totally normal and judges will enforce it because it's fair to BOTH sides. Just make sure you actually have them initial that specific section so they can't claim they didn't notice it.

gray3141mo ago

@kimblack nailed the hold up part but judges also look at whether you actually did any work yet, not just the timing.

the_felix1mo ago

Agreed with @kimblack, I put in a 40% clause and judge upheld it when client ghosted.