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this post was submitted on 23 Feb 2024
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I was a small business owner in this same situation. I got a contract, I got partial payment up front, then they reneged upon my finishing the job and asking for the rest of the payment. They said they'd pay me 10% of what they owe, AND demanded additional services for free. I took my contract to a bunch of lawyers, all who said the same thing "They're too rich to sue. They will delay, stall, and after years, even if you won, they still probably won't pay." What they owed me, they bragged about paying every time they flew their private jet. They could easily have paid, but instead they decided to destroy me and my company.
This isn't something the small business owner can protect against. To the rich, none of us or our laws matter.
The partial payment wasn't large enough if it left you wrecked at the end. Generally the partial payment should pre-pay to cover all of your expenses and labor. The final payment is the profit margin. That way you are never on the hook for a potential loss and will always break even.
So for the bakery, they should have had a full prepay policy on all special orders. Even if "customers" walked away because of the policy.
I don't know what you think profit margin is but it's not much. At the point of getting full expenses you might as well ask for full payment.