In a cautionary tale for any company engaging independent contractors, a Dutch court recently navigated the messy fallout of a prematurely terminated IT project. The case highlights the critical legal question: when a freelancer stops work, who gets the code, and who pays for what?
THE BOTTOM LINE
- Partial Work Demands Partial Pay: Even if a contract ties payment to full project completion, a contractor who leaves mid-project is legally entitled to a “reasonable” fee for the work already done. You cannot simply refuse all payment because the project is unfinished.
- Work Product Cannot Be Held Hostage Indefinitely: A contractor cannot withhold the delivery of partially completed work forever. The court can—and did—order the handover of digital assets once it secured a fair partial payment for the contractor via its judgment.
- WhatsApp Agreements Are Binding but Risky: This entire dispute originated from a WhatsApp message. While the court upheld it as a valid contract, the lack of detail on termination, partial deliverables, and payment schedules created the ambiguity that led to litigation. Formal contracts are your best defense.
THE DETAILS
The dispute involved De Veiligheidsgroup B.V., a security training company, and a freelance IT developer contracted to build its core IT infrastructure and website. Their agreement, cemented over WhatsApp, stipulated a total project fee of over €37,000, payable only after the system went “operational.” Before completion, the relationship soured, and the developer ceased work. He refused to hand over the partially completed website code, demanding the full project fee. The company, unable to access its critical digital assets, initiated summary proceedings to force the handover.
The Rotterdam court analyzed the arrangement under Dutch law as a contract for services. It pointed to a crucial provision in the Dutch Civil Code (Article 7:411) that governs situations just like this. The law states that if a service contract is terminated before the assignment is finished, and the fee is dependent on completion, the contractor still has a right to a reasonably determined portion of the fee. Because payment was explicitly linked to the “operational start” of the project, this rule was directly applicable. The developer was not entitled to the full fee, but the company could not walk away paying nothing.
In a pragmatic ruling, the court broke the stalemate. It established that, based on the evidence presented, at least 21% of the work had been completed. Therefore, it ordered a concurrent exchange. The developer was ordered to transfer the technical foundation of the website and all necessary account credentials to the company within seven days. Simultaneously, the company was ordered to pay the developer €7,851.90, representing 21% of the total agreed fee. By granting the developer an enforceable judgment for this amount, the court removed his legal justification for holding the company’s digital property hostage.
SOURCE
Source: Rechtbank Rotterdam
