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We are having trouble collecting payment from a contractor. What can we do?

CaliforniaChange OrdersMechanics LienPrompt Payment

We have a customer who signed an agreement with us on 10/15/2019 to perform some work at their commercial building. We were told we could complete it installation on 12/2/2019. The customer ran into issues with his General Contractor and permits and is not allowing us to complete our scope of work. We have asked the customer to at least pay a progress payment to cover the cost of the materials do to this delay. As of today, we have only received one small payment which did not even cover the cost of materials. The customer is now telling us there will be an at least another month delay due to the COVID-19 order. Can you please advise what rights we have in regards to collecting this debt that has been outstanding since December 2, 2019?

4 replies

Mar 27, 2020
Your rights will likely depend on the terms of your contract. Your rights could include: 1. Terminating your agreement for lack of payment and filing a mechanics' lien immediately. 2. Using the materials on another project, assuming the materials are fungible and not special order. If the project restarts, order new materials for the project. If there is an increase in prince, you may require a change order. 3. Your contract may also preclude you from taking any action at this point in time. Ultimately, you will need to review your contract to determine your rights.
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Mar 27, 2020
There was a signed estimate which outlined the scope of work but did not specify the time frame. However, we have email communication where the installation dates were discussed and agreed upon. Will those emails be sufficient for option #1? The materials cannot be used for another project as it was a custom order.
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Apr 22, 2020
There was a signed estimate which outlined the scope of work but did not specify the time frame. However, we have email communication where the installation dates were discussed and agreed upon. Will those emails be sufficient for option #1? The materials cannot be used for another project as it was a custom order.
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Apr 24, 2020
I apologize for the delay in responding. Given that you still have not been paid, I would file a mechanics’ lien. Since you do not have a contract (only an estimate and scope of work), there is no contract to terminate.

If you have further questions, please do not hesitate to contact me.
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