The story goes like this:
I and two partners launched a studio in February and we needed a good logo. One of my partners had a designer friend who was kind enough to create a set of potential ones without asking anything in return. My two partners liked them, but I thought that we could do better.
I thought I'd contact one of my close friends, whose artistic skills are impressive to say the least, so I told my partners about my concerns and plans, and we agreed upon it. They figured it'd be better to have a bigger selection to chose from, and I figured that the chances of their not liking my friend's proposal would be next to nothing. That turned out to be a mistake.
So I called my friend up and showed him what we already had and my ideas on how he could improve on them. He seemed interested in the project and said he'd work on it and get his proposals ready within the two/three week deadline. He himself used the word 'proposals', and did not mention cost. Nevertheless, I was ready to pay my friend any reasonable amount if they turned out to be better than the logos we already had, which I had little doubt they would.
At the end of the deadline my friend's proposals were done, and he sent them over, together with a very reasonable price. And they were good, better than the logos we already had. So I was prepared to pay the necessary amount and conclude. Unfortunately, my partners preferred the other ones. Fair enough, we were two vs. one, so the decision was made in their favor.
My friend thought that we simply didn't want to pay him for his work, and I made sure I'd talk to my partners so that we'd give him something in return for his work even though his logos were not going to be used. So we talked it over and decided to pay him half the amount he had asked just as if it were a lost deposit. I thought this was fair, considering that his logos were not going to be used and that there had not been any sort of price agreement before. We were, after all, good friends, and I made that second mistake of assuming things will be alright because of friendship.
No. My friend got all pissed off and started calling me unprofessional. He wanted the full amount for his proposals. He had apparently been assuming that his work was going to be chosen and felt that paying him half was somehow deprecatory and disrespectful to his work. I have asked some other friends in the art/design business, all of whom seemed to confirm that in situations like these the full amount is not paid unless the proposals are chosen.
In the meantime, he doesn't want to meet me to talk it over and I have resorted to emailing him. I gave the half amount to his sister (who I meet more regularly since her boyfriend is another friend of mine), and it is obvious that he has made it seem like I just want to rip him off. If anything, I am feeling like the one being ripped off.
I think I'm being fair, but I wanted to know whether you guys think so as well. Specifically, how are things normally done with regards to proposals of this kind?
I also have in mind to just go find the guy, give him the amount he wants, and say a few things that are on my mind. Not to save the friendship, which is by now already dead, but so that he understands what friendship means. I never asked a penny from this person. I tried my best to help him when he had trouble with his ex, I drove him around (since he doesn't drive), I bought him drinks (and got nothing in return). But that is all extra background - what I really want to know is whether I'm being fair on this point or not.
Thanks and sorry for the long post.
NB: Business and friends don't mix very well.