Freelance Consultant Struggles: How Can I Ensure Payment After Contract Termination?

As a freelance consultant, I entered into a Letter of Intent (LOI) with a software company to provide services in exchange for a fee. This fee was contingent on the company reaching certain turnover milestones, with the earliest payment expected 6-8 months into the engagement. Only reimbursements for out-of-pocket expenses were agreed upon during this period. However, after 4 months, the CEO decided to terminate the contract (LOI), citing that my services were not deemed valuable enough to retain.

Upon questioning the compensation for the work done over the past 4 months, I was informed via email that a nominal amount, termed as an honorarium, would be paid with no room for negotiation or discussion. This payment was scheduled to be made 3 months after the termination of the contract, with the reason given being a lack of available funds.

With the payment deadline approaching, the CEO has been unresponsive and has not provided any updates on the payment status. The company's founder has stated that they are currently unable to make the payment due to financial constraints.

Seeking Advice on Payment Recourse

As an individual, what recourse do I have to ensure that they fulfill their payment obligations? Any suggestions would be greatly appreciated.

Thank you

As I believe that before tendering services to your client, you must have a service agreement that is signed by both parties. This agreement must contain the terms and conditions of services as well as basic terms, and it should be properly registered through Notary or Franking/Stamp papers.

If your documents are online as mentioned above, then you have reserved rights under "The Indian Contract Act, 1872" for recovering your dues from your client along with damage and loss charges.

You may send a notice from an advocate to the client. If there is still no positive response from them, you may file a case against them in court, seize their property, and recover the money.

You can hire a good advocate who can help in this regard.