Us Client Accepted And Used Our Work, Now Refusing To Pay Unless We Sign Their Harsh Retroactive Contract

Location: I’m based outside the U.S. (Australia), client is a U.S. company (Florida)

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TL;DR: We completed and delivered a full consulting project. The U.S.-based client used and accepted the work without objection. Afterward, they said they cannot pay unless we sign a contract with sweeping legal terms that were never agreed to. These include an overbroad non-compete, IP surrender, and liability clauses that could expose us even if they breach. We’ve decided to walk away, but want to know if we can protect ourselves and/or pursue any options.

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Hi all,

We’re a small consulting firm based outside the U.S. Earlier this year, we provided services to a U.S.-based tech company. Everything was scoped, approved, and delivered as agreed via email, Slack, and standard invoices. There was no formal signed contract at the beginning due to our internal restructure (we moved from sole trader to company-trust structure during the engagement), but the work was carried out in full, and there was ongoing written communication, an agreed contract draft with one of their executives, Slack messages, and no objections from their team.

Once we delivered everything, they said their internal policy and U.S. legal requirements prevent them from paying without a signed agreement. We sent a clean, retroactive contract that reflected the actual engagement and included adjusted payment terms in their favor. They rejected it and sent their own version, which included: • A vague, 2-year non-compete that could block us from working with any clients that might vaguely be considered their competitors • Claims over our independently developed IP (methods, tools, processes unrelated to their project) • Extreme liability terms, including risks where we could be held liable even if we weren’t at fault, or even if they failed to pay

They said they won’t release payment unless we sign their version. We’ve declined. We have documentation (messages, deliverables, invoices) but no signed agreement. The amount is significant to us (roughly $10K USD) but probably not to them.

We’ve decided to write off the project to avoid further harm, but we are left asking:

1. Can we assign this debt to a collections agency (from Australia to Florida)?
2. Would small claims court in Florida be an option even for a foreign business? We don’t have a lot of disposable cash to spend on legal fees which can stack up pretty quick.
3. Is there any way to protect ourselves from reputational or legal blowback if we share what happened or respond if they escalate?

Thank you for any guidance or perspective.