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Do they have to return the Advance in this case? Is there any case where it makes sense fo reject the Advance?

It depends on the contract, but generally, if the author worked in "Good Faith" (did the work legitimately) and the project was cancelled due to the client's strategic shift, the advance is usually non-refundable. The advance pays for the time already spent. If I hire a carpenter to build a table, and halfway through I say "Stop, I want a chair instead," I still have to pay for the half-table he built.

If the carpenter took 1/3 of the project quote, built half a table, and decided to quit and join the circus, would he keep the fee? For a carpenter it would be a small claims court, for this it’s a gift. Which is weird.

I love the circus analogy! That made me chuckle.

You are right—if the carpenter just ran away, he would usually be sued. But in this specific case, the client (publisher) agreed to let him go. It’s more like: The carpenter said "I'm quitting to join the circus," and the client said, "Fine, keep the deposit, just leave."

In finance, we call this a "Write-off" to maintain relationships or avoid legal costs. It seems the publisher decided it wasn't worth fighting over.

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