We have done several projects for a client. One project had some issues and now our client would like to use the money owed on other projects to offset the additional costs related to that project. We have no contract (verbal agreement and a PO that does not list anything about backcharges or setoffs). Before I escalate things, I'd like to know if they have the legal right to do that. Thanks
Unless you have a contract that permits the owner to use money owed from one project to pay for damages on another project, the owner is not entitled to do so. So, retaining funds that are owed on one project is a breach of contract for which you can sue to recover.
But keep in mind that if you file a suit, the owner will likely defend by asserting damages from another project, or file a counterclaim seeking damages from the other project.
Retain a construction attorney to evaluate your legal situation and to provide advice.
Good luck.
It depends, BUT you do not have to accept “OFFSETS OR CHARGE BACKS”
Send your notices and file your liens