SEO Companies should have ironclad contracts that specify the terms of the business deal and what the deliverables are. Without it, you may not get paid and you may risk your business's future. This should be a no brainer for any company, but often it is something many businesses avoid.
That is the story of one such SEO who was stiffed by a client after not delivering based on the client's expectations, but met their own expectations. A HighRankings Forum thread has some of those details. In this case, it is a bit unique in that the SEO company did the work for a different company, who outsourced that work to the client.
The SEO said:
I currently work with a web design firm who subcontracts all of their SEO to my company (at a huge discount too). I recently optimized a site for this web designer and her client's site ranked on the first page of Google for 5 of their keywords within a few weeks. Well, her client refuses to pay simply because his site is not listed above his competitors (his site varies from position 5-8). We had a call with him... I explained the process of SEO, what Google looks at, etc. etc. He then says he won't pay unless we can get his site to rank in the top 3 positions. I told him his expectations were unreasonable and even Google couldn't guarantee top 3 rankings.
My question is... now that we've discussed the issue with the client; educated him on SEO; and told him that even Google could not give a guarantee - how do I get him to pay? I don't know what else to tell him.
Jill Whalen of HighRankings asked a simple question, "What does your contract say? " It is really that simple.
I'll be honest, I rarely do contracts with clients. I have detailed proposals with deliverables, but there is no legalize to it, just a detailed proposal. I also don't offer SEO services, so it is a bit different.
Lesson learned, have a solid contract with any of your clients and vendors.
For more on SEO contracts, see:
Forum discussion at HighRankings Forum.