We picked up a project for a client and we used a outsider to code the project for us. The agreement was after the client approved the software and accepted it, the payment would be forwarded to him. The client then dropped out and have been unable to contact him for the finished software. I have never recieved the software since the client dropped and the demo was hosted on the developers server, except now he is hounding me for payment of it.

Is this my responsibility if the client dropped out of the deal and refuses to pay?

Thanks.
:(

This really depends on what the terms of your contract were with the programmer(s). Did you tell them the conditions of the deal, that payment to them was conditional on the client accepting their work; and that you were acting as a broker?

By the sounds of it, you didn't draw up a contract. What you really should do, is pay him. You can do either, pay him and get on with life, or not pay him and have your reputation ruined.

Though this does get me a little:
client approved the software and accepted it, the payment would be forwarded to him

Did the client approve the software? - Or did he just "run"?

That was the END of the sentence, read the beggining.

yes. the coder and myself agreed that when he completed the project and I was paid, I would forward the money from our account to his. I acted as a middleman. I understand how he is upset but when the client backs out when he was the one who was paying for the project, how can I afford to pay him for the software?

Also, I have offered to help him sell it but he continually says that he expects me to pay for it. I have not even recieved the working software from him and it remains on his servers.

Just pay up the money, and then try to sell the software yourself.