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How can we Defend against Delay letter, collect past due balance and terminate relationship?

We have a customer that paid late and is now trying to hold us responsible for work delay because the equipment and supplies needed cannot be delivered on time for their target opening. They sent an official delay of work letter. We would like to defend against the delay claim (our contract clearly states payment must be made prior to purchasing any supplies or equipment and may cause delays in scheduling) they were also reminded of this 4 times between 5/11/2020 and 5/22/2020 when attempting to confirm scheduling. We would also like to terminate the relationship entirely. This customer has a substantial past due balance as well so the relationship just needs to end. How can we go about doing those things in a legal and professional way

1 reply

Jun 22, 2020

It's important to do things by the book when terminating the contract. Otherwise, you might actually create liability for yourself - even if your customer is the wrong. Additionally, if there are any provisions relating to delays, those should be insightful, too. Generally, an owner can't cause a delay then make a claim for the delay they've caused, but it will still be important to take all necessary steps to dispute the delay claim. In any event - when the stakes are high, it'd be wise to consult a California construction lawyer so they can help navigate the situation. You can find one here: Find a California Construction Lawyer. If you're not quite ready to cut ties with the job, utilizing California's stop work notice rights could be another way to cause headaches for the customer. By sending a Notice of Intent to Stop Work and then a subsequent Stop Work Notice, California claimants can legally suspend work and force their customer to pay what's owed. More discussion, here: When Does a Contractor Have the Right to Suspend Work? If you're looking to terminate the relationship, it'd be wise to review the contract - particularly any termination provisions. Those provisions will dictate how the contract may be terminated and for what reasons. If you're entitled to terminate the contract for convenience, that might make things easier. If there's a termination for cause provision in your favor, then you might be able to cite specific breaches of contract giving rise to your valid termination (such as extremely late payments). In either event - it's important to provide notice of the termination, and any contractual requirements there must be followed.

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