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How can I get my money back for incomplete job?

2 months ago

My contractor has not completed the job after a year. He actually owes us at this point. Are we allowed to retain property. We live in delaware

Senior Legal Associate Levelset

I’m not sure I totally understand the situation. Still, let’s look at some relevant considerations.

If there’s a construction schedule and that schedule hasn’t been followed resulting in serious delay – there’s a chance the contract has been breached and that termination may be appropriate. Further, if the contractor has stopped performing work on the project, that may also serve as grounds for termination. Though, it’s always important to be wary of a wrongful termination since that’d only complicate matters.

In any event, if the contract creates requirements for terminating the contractor, those requirements should be followed – regardless of whether the contractor has been responsive or showing up for work. And, even where the contract is silent as to how termination should be executed, it’s a good idea to provide written notice of the termination and to provide specific reasons for the termination. Further, including steps the contractor can take to avoid the termination might be a helpful step, too.

Recovering payment already made to a contractor

Even if it’s clear that a contractor owes the owner for one reason or another, forcing that payment will be an uphill battle. A contractor won’t be eager to pay back what they’ve received. So, if an owner is really determined to force their contractor to pay back some of what’s been paid, they might need to utilize demand letters or legal threats to coerce their contractor into cooperating.

If that doesn’t work, initiating a claim for breach of contract might do the trick. And, depending on the size of the claim, pursuing the action in Delaware small claims court may be an option – small claims court is typically much more efficient and far less time consuming than traditional litigation. But, for disputes that exceed $15,000, litigating the matter via traditional means would be necessary.

Withholding a contractor’s property

For the purposes of this answer, I’ll assume you’re referring to retaining a contractor’s property as a tool to force them to either complete the contract or pay back some of what they’ve received…

No matter the reasoning, it’s likely not a good idea to withhold a contractor’s property in order to force them to make payment or to continue work. This may actually compound and multiply legal problems rather than solve any. So, if a contractor has tools or equipment that belongs to them which is left at the project property, it’s probably not a good idea to hold that ransom to force payment.

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