[yinyang]

Originally Posted by Moncal

Why would it have to be a new escrow service? Why couldn't concerned clients and coders just use an established escrow service such as escrow.com?

escrow.com as well as most, if not all companies like it out there only deal in hard goods. not services. they'll provide escrow services if a buyer is purchasing a product, but not if they're purchasing somethine like web design services, etc.

Originally Posted by Dean C

Another issue you'd have is disputes. Would you want to interfere and investigate entirely the situation before you decide which way the funds go? A contract doesn't always protect everyones behinds unfortunately And if the client/coder wishes to take further action you could get in the firing line too

i think if a coder and client were to have disputes, then they would actually benefit by having the funds escrowed. they would have more incentive to work things out. the escrow company will not release funds unless they either 1) get a mutually signed 'completion of services agreement' or 2) if they get a court order.

by having the funds escrowed, neither party has the money. the client has already paid the money and therefore they don't have the money to withhold from the coder, and the coder doesn't have the funds to runaway with. they would have to work things out.

alternatively, without this service, and assuming there is a dispute, then i can see the following scenarios:
1. client pays full amount for job and receives work product and claims it is unsatisfactory.
2. client pays some amount for job and receives work product and claims it is unsatisfactory.
3. client pays zero dollars and receives work product and claims it is unsatisfactory.

in any case, let's say the above parties are unwilling to work out their dispute, then:
a. in scenario one, the coder already has his full fee, what's his incentive to prove his work is not unsatisfactory.
b. in scenario two, the coder already has half his fee and maybe he did do a quick job, but he's got paid half so he may be okay with not finishing the work (particularly if client relations turn bad)
c. in scenario three, the coder has done all the work and turned it in, and the client claims it is unsatisfactory, (when let's say it really isn't), and then refuses to pay.

the only resolution for a, b and c is legal means. now if the job is worth $300, then the time and money it takes to file a lawsuit is unrealistic, especially if you're dealing with client and coder who do not live in the same area, state, country, etc. if they lived in the same city, then small claims court would be the answer, but i am sure that 99.99% of all such client-coder relationships take place with parties that do not reside near each other.

however, if there was an escrow service, and scenarios 1, 2 and 3 were to take place, then a, b and c do not apply. neither coder nor client has the funds so no one can realistically take advantage of another person.

what the escrow company does is to prevent malicious practices or clients/coders with mal intent. if a client and coder are serious about doing business, then obviously an escrow company would not be needed as they should be able to work things out.

however, if a client or coder unwillingly meets a "crook", then an escrow service, i think, would definitely help be a deterrent.

in fact, having a client or coder even request such a service may help weed out would be "crooks" or those who are trying to take advantage of others. i mean, we're talking 1% of the entire fee that is also tax-deductive since the service would be operated as a 501(c)(3) tax exempt non-profit.

if i were a client or coder and requested that payment be made into an escrow account and the other party refuses, that would, at the very least, raise a red flag in my mind.