It’s never the email or communication you want to receive – information that a current or former client is threatening legal action against you and your business. The anger rises. The pit in your stomach forms. The fear of attorneys and legal issues…how did it get to this point?
Fortunately, there are steps you can take to diffuse the situation, and ensure you are coming to a fair and equitable solution.
1. Don’t panic
Often times the threat of legal representation and/or legal action is NOT a bad thing. Attorneys are trained to help business owners resolve matters in a fair and equitable way. If you have a signed contract with a client who is now demanding a refund or some other action by you, you are well within your legal rights (and should!) follow what the contract says. Thus, if it says “no refunds” in the contract, in most circumstances you are absolutely able to stick with the contract provision.
2. Review the Contract signed by the client
What does it say? What is the refund policy? How are disputes to be handled? The purpose of a contract is that it controls in the event of a dispute. When a dispute occurs, if you have a well-written, fully executed contract, rest assured that you just need to follow what the contract says.
3. Reach out to an online business attorney if needed
If the situation is escalating, or you’d simply feel better chatting with an attorney about the situation – reach out! Business attorneys can always help you confirm your rights under the contract and the law, and can respond to legal questions as they arise. Additionally, if needed, they can respond to the client and their attorney, to help you delegate a bit and relieve some of the stress.
4. Make sure your contract is where it needs to be
Often times when a dispute arises, business owners realize their contract doesn’t have the language they need in it, or that there are things they want to add. Business ownership is a learning process! If this process teaches you your contract isn’t where it needs to be, take it as a sign and fix it!! Work with an online business attorney to update your contracts so they are ready to go, and you can reduce the likelihood of the issue happening again.
5. Cost/Benefit analysis of fighting a refund request versus giving one
If the conflict continues to escalate, at some point you may want to take a step back and look at the big picture. If your legal fees are piling up, or you’re looking at attending arbitration to resolve the issue, sometimes it can be beneficial to look at the amount the client is actually requesting as a refund. Yes, you may be in the right, but if your legal and resolution fees are increasing beyond what the refund amount is, it may be the best business decision to allow a refund to move on.
Need more help in this area? Feel free to reach out to Christy at christy@coachlegally.com to talk more about it!
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