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My customer is avoiding making final payment in Florida. Am I in breach of contract?

I didn’t send an invoice to get paid for remainder on a Construction project . Customer and I speak often... didn’t send final due to add ons outside of original scope of work... still waiting for impact door to come in that they originally did not want to do. I get a text today stating that because I didn’t send him the invoice yesterday, he’s considering himself paid in full and I being breach in contract. If I’m not mistaken, until I send final invoice then he has 14 days to pay my company... we are a residential licensed and insured general contractor in the state of Florida... and mind you the remainder is 80K... I am not desperate for money and don’t haggle my customers until I’m 100% complete... am I in the wrong here?

1 reply

Feb 11, 2020

Billing should be done in accordance with the contract. So, if the contract calls for specific billing periods, or if the contract calls for billing after specific milestones, then that billing and payment schedule should be followed. And, to be sure, any sound contract should provide some sort of framework for when the job will be billed and paid.

Breach of contract and late billing

With that being said, being one day late on sending an invoice certainly won't result in a contractor forgoing the right to final payment. And, of course, there are different levels of contract breaches - not every little breach will completely derail the agreement. Instead, material breaches of contract are typically the kind that will cause major issues on the job - and, in most cases, late billing that likely wouldn't be considered a material breach of the contract (particularly when it's only a slight delay). It's unfortunate, but delays happen in the construction industry - whether the delay is in the project progress, or delays in exchanging paperwork. And, falling a little behind on sending invoices might result in some sort of fine, penalty, or discount under the contract (if the contract contains provides for fines, penalties, discounts, etc.). However, failing to send a final invoice on time won't completely waive the ability to collect final payment on the job.

Florida's prompt payment rules

Regarding the 14-day rule you reference above: It sounds like you're referring to Florida's prompt payment requirements. Under those requirements, a Florida contractor must be paid within 14 days of a proper invoice. And, if payment isn't made on time, then those laws allow for interest penalties for payments made out of line with that schedule. But, that simply dictates when payment should be made after an invoice - not when a job should be billed in the first place.

Recovering final payment from an unwilling customer

If a customer is being finicky about making final payment, there are some steps that could help to get paid. First and foremost, it's important to bill your final invoice once that time comes. Final billing should be submitted regardless of the customer's behavior or arguments that the bill is late. If final billing is submitted but not being paid, sending simple invoice reminders could prod a customer into doing the right thing and paying the bill. If that's ineffective, escalating things a bit with a demand letter could do the job, too. And, of course, taking things another step further with a document like a Notice of Intent to Lien can be really effective, too. Though, considering the adversarial nature of lien claims, it might not always be the right move to send a Notice of Intent too early. Finally, if the payment dispute really gets out of hand, utilizing a Florida mechanics lien is an effective way to force payment. And, making legal claims could do the trick, too (though, most claimants will prefer to first proceed with a lien claim, if given the option).

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