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when a client doesn't pay

One inevitable situation that every self-employed person faces is the uncertainty of a client going rogue. There are contracts in place and agreements signed, but what to do when the client doesn’t pay? Every call is full of apologies and assurances by days turn into weeks and then months. Here’s a list of things that helped MegaMobius, I hope it helps you too.

  1. READ your contract.

In the excitement of starting work with a new client, did you read the entire contract, or did you just change the date and client name? Were you smart enough to ask for 50% advance and is there a clause on what happens in the case of late payments? Where are the details of services listed? Be 100% clear on where you stand.

  1. READ the law.

Thanks to the infinite free resources, it is easy to read the same law pertaining to your case. Ensure that you understand the geography, the issue, and what solutions are offered. UAE is built on the hard work of small business owners and the laws offer a quick resolution in certain cases, you can add late payment with legal fees and interest payments as well(based on contract, please check individual cases). Arming yourself with legal knowledge lets the client know that they can’t take advantage of you.

  1. Where are the documents?

Find out the list of emails where the contract/scope of work and payment schedule were decided by both sides. It should be clear that there was no confusion about the scope of work or the payment. If you are a content provider – take screenshots of the client’s LinkedIn or website wherever your content appears but hasn’t been paid for. Check with Dubai Economic Department (DED) or FIT Dubai office to see if the company has a valid trade license


  1. Ask for the payment over email.

Ensure that you record every conversation; if you chat over a call, send a summary and ask for confirmation. It might feel like an email every day asking for an update and a reason for the delay. download software that allows you to see when an email has been Read and by whom. Having a paper trail is crucial. If you feel like you are overthinking…just remember that a client’s nonpayment can soon lead to a liquidity issue for you and then you might find it difficult to pay salaries and vendors.


  1. Offer a solution.

Small business owners usually suffer more because of overdue payments, if your client is also a small business then it’s best to offer a solution through a revised payment schedule. Frame a Final Demand for Payment and if the client adheres to this, you can be assured that they are genuinely interested in paying back. Empathize with them and pray that the new received schedule works and stop reading point 6.


  1. Ascertain the need to the next step
    If they did not accept and act on their resolutions it has not worked, send them an email with the contract and invoices and add that they do not adhere to local laws and your agreement. Attach the provisions you learned about in Point No. 2 and make it very clear that a lack of response will lead to legal ramifications. By this point, you should have received some response. If you are still reading the post, the client has not paid you yet and you feel fooled by them, now imagine them posting about their grand success and celebrations on social media… makes you furious, doesn’t it? Trust your instinct in deciding whether or not you should proceed with point number 7 or not but remember that as per the UAE commercial law, you are entitled to claim interest on the unpaid dues, along with the outstanding payments.

    “Debt is one person’s liability, but another person’s asset.” – Paul Krugman
  1. Speak to a lawyer and send a legal notice.

Many consultancies work per hour and can help you quickly (if you have your documents in order, i.e.) without charging a lot. There are also many free legal clinics provided by law firms in the UAE where you can receive information on whether or not you can add late fees. The Payment Order Proceedings – expedited court proceedings for payment orders and execution are the most likely course of action for small payments. It is generally noticed that most clients (I am told) will respond to a legal notice with complete payment.

legal notice

  1. The Law offers a solution
    If you have reached point 8, then you know that you have to sue this client because despite MANY attempts they have NO intention of paying. Going to through the court may feel like a hassle, but learning about this part of running a business is essential too. Dubai Chamber of Commerce and Industry has announced the launch of a task force under its Sustainability Network, which addresses the issue of late payments to subcontractors and suppliers. 

    In the UAE, such cases are registered and resolved relatively quickly(I am told), so sit back, and the law takes its course. Once the payment order is issued, the debtor has only fifteen days to appeal and the rules of ‘immediate enforcement’ applies to the payment order post fifteen days or in the absence of an appeal from the debtor.

Disclaimer: This is NOT a legal blog, all sources are listed and we are grateful to the lawyers who share this invaluable information for small businesses online and for free.