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can a customer expect a refund of contract payments if they decide to cancel their contract mid way

CaliforniaConstruction Contract

Entered into a solar PV installation contract with a event center business owner in August 2019. Permit approval took unexpected delays. Permit issued around 3/25/20. Customer paid milestones for: 1st = Design and Engineering and 2nd for Permit Issuance. Customer is concerned over event cancellations due to COVIT-19 and has asked to put things on hold. Possible cancellation of contract. What am I responsible for in this case? Am I to refund any part of the fees paid?

1 reply

Apr 6, 2020

The answer to this question will largely depend on the terms of your contract. Most construction contracts allow for the owner to terminate the agreement for convenience. Under most termination provisions, an owner is required to compensate the contractor for all work performed and costs incurred. Consequently, it will depend on how much you collected from the customer as to whether or not you will have to return any money. If you collected more than you earned (ie a deposit), then, yes, you will have to refund some money. If not, then you will not be required to return any money.

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