What to Do When a Client Ghosts - Solivagant Legal


What to Do When a Client Ghosts

December 20, 2021


In business, in love, in life…ghosting sucks. Not only does it feel awful, it makes you doubt yourself and your ability to judge character. And when money is involved like it is in business, it can feel like both a professional and a personal betrayal, especially if it’s a client you’ve worked with closely and built a great relationship with. You thought you knew them, you thought you both had a great deal of mutual respect, you’d never think they’d treat you so poorly.

Here’s the thing about ghosting: it’s rarely about you. Most of the time it’s the other person’s issues. And while that’s nice to hear, it doesn’t make it any easier not to personalize it, does it?

While I can’t really help with the emotional part of it, I can help with the legal bit. Here are my tips: 


Start with a great contract.


Start with a great, lawyer-drafted contract. Ghosting is a perfect example of where a crappy contract is going to come back to bite you. If you have strong payment terms, a detailed scope of work, and comprehensive duties and responsibilities sections in your contract, it will minimize the chances of misunderstandings and ghosting:


  • A detailed scope of work lays out absolutely everything you’ll be doing for a client and when. It includes relevant deadlines, milestones, and timeframes. It sets out approval windows, meaning how much time a client has to approve revisions and other project details.


  • Outlining your clients’ duties and responsibilities enables them to understand upfront how to be successful through working with you. Why is this important? If they’re not achieving the results they think they should be achieving but they’re not fulfilling their obligations under the contract, you can point to this section.


    • Our contracts prompt you with questions to ask yourself to make sure you’ve covered all your bases in both of these sections and give you examples to use to guide you, but it’s important to give some thought to these sections.


  • Strong payment terms will detail exactly how a client pays, when they pay, what happens if they’re late (including what constitutes being “late” and how much you’ll assess in late fees and when), and what happens when they fail to pay or otherwise default. They’ll outline what a client’s time frame is for being late before you can terminate services altogether (while they’re still on the hook for the outstanding balance or late fees). Strong payment terms will also talk about your remedies for recouping fees (e.g. debt collection service, legal action).


Basically, if you start with a great contract, a client is less likely to ghost in the first place because you’ve level set their expectations about your services/program/course. They know exactly what they’re getting through working with you, they know exactly how much they’re paying, when, and how they’re paying, and they know exactly what happens when they fail to pay. They also know your expectations of them, and what they need to do in order to have a successful working relationship and/or achieve the best results through working with you. In my experience, it’s just like setting boundaries with someone. They’re more likely to respect your boundaries if they know them upfront, just like they’re more likely to respect the terms of your contract if they’re detailed, precise, comprehensive…with legal teeth to protect you.


Set up an automated, internal process.


A great contract is your non-negotiable foundation, but unfortunately, a contract isn’t always going to protect you from ghosting. I would recommend you set up an internal process for late payments and default payments.


  • For example, either automate payments or automate payment reminders. One option is having a system set up where you send out email reminders prior to your invoice that the invoice is coming in advance of the invoice, then, depending on the window you give clients to pay before their payments are considered late, set up reminders every day or every few days that their payment is due. On the last reminder you can say that “if payment is not received by X time, we will assess a late fee of $Y every day until satisfactory payment is received.” Your contract should state what “$Y fee” is, as well as outline how many days they can be late before they’re considered to be in default.


    • If a client still hasn’t paid after you’ve started assessing late fees, you can automate late fee reminders showing the balance owed + late fees. You can also automate reminders saying that “if payment is not received by X date, you are considered in default.”


  • Depending upon the type of services and your relationship with your client, you can work with the client directly and suggest alternative payment arrangements. This should really be on a case-by-case basis, though. You’re too busy to negotiate individual payment terms every time someone fails to pay. 


Remedies if a client still won’t pay


If you’ve assessed late fees and terminated their access/your services, and they still haven’t paid, you have several options. Some business owners go right to a debt collection agency or hiring a lawyer. This is your choice, but both come with drawbacks:


  • Hiring a lawyer to collect debts is a hassle and they’ll take a (sizeable) portion of whatever is collected. Same with a debt collection agency.
  • A good intermediate step is sending a formal demand letter. If you hire a lawyer, they will do this, but you can do it yourself first. I provide a template to everyone in Back Pocket Legal, but you should include the basics like how much they owe you, when amounts were owed, a summary of the actions you’ve taken to date and communications between both parties, attaching evidence like your contract with payment terms highlighted and/or invoices, reiterating how they can pay you ASAP. Be polite, but firm. State that you want to resolve the matter amicably, as soon as possible, without legal action if possible.


👻 Ghosting sucks, there’s no way around it. As you can see, even the remedies with a great contract can have drawbacks (e.g. losing time chasing or losing money collecting with a lawyer or a debt collection agency), but without a contract, you’re completely SOL. You have no ammunition to incentivize a client to pay and to pay on time, and no remedies if they do ghost. With the right contract foundation you’ll minimize the chances of it happening to you in the first place, plus give yourself remedies in the event it does. 


If you’re unsure what contracts you need, head to our Homepage and take our contracts quiz, or grab our free checklist which will walk you through what you need by business type.