My Client Cancelled the Project Halfway and There Is No Kill Fee. Am I Owed Anything?

Start with the termination clause

Many contracts that lack a kill fee still have a termination clause. It may let either party end the agreement on notice and say what is payable on termination, often fees for work performed to the termination date. If your contract has one, it will usually decide the answer. Check whether notice was required and whether the client gave it.

What if there is no termination clause either?

Where the contract simply stops mid-project with no termination terms, you generally still have a claim for the reasonable value of work performed. Courts do not usually allow a client to take the benefit of partial work without paying for it. You are unlikely to be awarded the full project fee, but payment for what you actually did is a realistic outcome.

Which legal principles decide what you can recover after a cancellation?

Most US courts draw on the Restatement (Second) of Contracts. If a client ends a project in a way the contract does not allow, that is generally a breach, and § 373 lets the injured party claim restitution for any benefit it conferred through part performance. Courts commonly measure this by the reasonable value of the work done, a claim often called quantum meruit, which is the basis for the reasonable value approach described above.

Where the contract gave the client no right to cancel, you may also be able to claim ordinary contract damages for the profit you would have made on the project. But § 350 bars recovery of losses you could have avoided without undue risk, burden or humiliation, so if the freed-up time can reasonably be filled with other paid work, your claim shrinks accordingly. That is a large part of why claims for the full project fee rarely succeed.

State freelance laws can add leverage on the part you have earned. New York's General Business Law § 1411(2) bars a hiring party, once a freelancer has started work, from requiring the freelancer to accept less than the contracted compensation as a condition of timely payment. California's Business and Professions Code § 18102(b) contains a similar rule that also bars demands for extra services or intellectual property rights as a condition of timely payment. Neither law creates a kill fee, but both stop a client from using payment for completed work as a lever to force a discount.

How to calculate what you are owed

• For milestone projects: the value of completed milestones, plus a proportion of the milestone in progress.
• For hourly or day-rate work: hours worked at the agreed rate.
• For fixed-fee projects: a reasonable proportion of the fee reflecting work completed, supported by evidence.
• Non-refundable costs you incurred for the project.
• Any deposit already paid, which you should be entitled to keep against work done.

Evidence that supports your claim

• Drafts, files and version history showing progress.
• Emails approving or commenting on work.
• Time records.
• Invoices for any costs incurred.
• Anything showing you turned down other work to reserve time.

A worked example

Ana agrees to write a twelve-part course for $9,000, with a $2,000 deposit and no kill fee or termination clause. After delivering six modules and drafting a seventh, the client cancels.

Ana keeps the deposit and invoices for the work done: six completed modules at $750 each, $4,500, plus half of the seventh, $375, less the $2,000 deposit, leaving $2,875 to pay. She attaches the delivered modules and the client’s approval emails. That is a reasonable, documented claim a client will find hard to refuse.

Who owns the partial work?

If you have not been paid for partial work, check whether the contract transferred rights on creation or on payment. If rights transfer on payment, you may be able to withhold rights to unpaid work until you are paid, which is significant leverage. Our guide to clients who want rights before paying explains why the timing matters.

Sample wording you can send

“I understand the project is being cancelled. Our agreement doesn’t set a cancellation fee, so I’m invoicing for the work completed to date: [summary], totalling $[amount], less the deposit of $[amount]. The completed materials are attached. Please pay the balance of $[amount] by [date].”

Add a kill fee next time

• A deposit of 25% to 50% before work starts.
• Milestone payments, so less is ever at risk.
• A kill fee, commonly 25% to 50% of the remaining fee.
• A notice period for cancellation.
• Rights that transfer only on payment.

Common mistakes

• Assuming no kill fee means nothing is owed.
• Claiming the full project fee, which invites refusal.
• Handing over partial work before agreeing on payment.
• Not documenting progress as the project goes.

Scope reductions versus cancellation

Sometimes a client does not cancel outright but cuts the project down. A significant reduction in scope after work has begun raises the same question as a cancellation: payment for work already done on the parts now dropped. Treat it the same way, and invoice for completed work on the reduced elements before agreeing a revised fee for what remains.

Reusing work that was not paid for

If the client cancels and does not pay for partial work, and rights have not passed to them, you may be able to reuse or repurpose that work elsewhere. That depends on your contract’s rights and confidentiality terms, and on whether the work contains the client’s confidential information or branding. Check before reusing anything.

Platform projects

On freelance platforms, milestone and escrow systems usually decide what happens on cancellation. Funds already placed in escrow for a milestone may be released for work delivered, and platforms typically offer a dispute process. Keep project communication and deliveries on the platform so that the record supports your claim.

When the client blames the quality of the work

Some clients respond to an invoice for partial work by saying the work was not good enough. If the client had approved drafts, commented without raising problems, or asked you to continue, that record undermines a quality complaint raised only after cancellation. Keep approval emails and meeting notes as the project goes.

If the contract includes a revision process, point to it: a client who never invoked the revision process during the project will find it harder to rely on quality as a reason not to pay for work already done.

How do you work out a reasonable value for partial work?

Where there is no agreed formula, reasonable value is usually tied to what you actually did and what similar work normally costs. Useful benchmarks include your usual hourly or day rate, the proportion of deliverables completed, the proportion of time elapsed on a fixed timeline, and published market rates in your field. The more objective the basis, the more persuasive the figure. A client is far more likely to pay a clearly reasoned invoice than a round number.

Negotiating a settlement

Most cancelled-project disputes end in a negotiated payment rather than a court decision. It is often worth accepting a slightly lower figure in exchange for prompt payment and a clean end to the relationship. Put any settlement in writing, including the amount, the payment date, and what happens to rights in the partial work once paid.

Quick checklist

• Read the termination clause and any notice requirement.
• Calculate the value of work completed with a clear basis.
• Gather drafts, approvals and time records.
• Keep the deposit against work done.
• Check who owns the partial work until paid.
• Send a clear invoice and payment deadline.
• Put any settlement in writing.

Key terms explained

These are the terms you are most likely to meet in the clause itself and in any correspondence about it, explained in plain English so you can read your own contract with confidence.

• Kill fee: an agreed payment due if a client cancels a project.
• Termination clause: the term setting how either side can end the agreement and what is owed.
• Reasonable value: fair payment for work performed where the contract does not set one.
• Deposit: payment made before work starts, usually kept against work done.
• Milestone: a defined stage of a project tied to a payment.
• Escrow: funds held by a third party, such as a platform, until conditions are met.

Can you claim for time you reserved but will not use?

A cancellation often costs you more than the work already done: you may have turned down other projects to keep time free. Without a kill fee, lost opportunity is hard to recover, because courts generally compensate work performed rather than income you might have earned elsewhere. That gap is exactly what a kill fee is designed to cover, which is why it belongs in your next contract.

Build cancellation terms into the contract

ClauseAudit flags freelance contracts with no kill fee, no termination terms and no deposit, and suggests clauses that protect you if a project is cancelled.