funds to keep his other projects going and who knows what else? It's a cost + 30% (I know!) contract. To date, he has presented invoices totaling less than, including his profit, than we have paid him. Now he wants more money. I asked for what? He said to pay, "XYZ Contractor". I said, but you already presented that as being paid. He said, no we only gave him a deposit. We didn't pay the whole bill that we sent to you. Is that legal?
You need to ask your contractor for a contractor's payment affidavit. It is an affidavit which lists all subcontractors and suppliers on your project who are owed money and the amount they are owed. You should also ask for copies of all invoices for the amounts listed in the affidavit. You should also ask for a list of all subcontractors and suppliers (including those who are not currently owed any money) and ask for lien waivers from those who have been paid. Finally, for those who are shown in the affdiavit as still owed money, you should negotiate to make direct payment to those subs/suppliers in exchange for a lien release. But above all, do not pay any more money to your contractor until you have followed these steps, or you will be at risk of construction liens.