Can a company withhold payment for a completed job that has a signed contract?
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Can a company withhold payment for a completed job that has a signed contract?
I was doing work for a company that required me to have workers comp and general liability insurance. About 2 weeks after completing the last job, I cancelled my work insurance because I
wouldn’t need it in my name for future jobs. The company still owes me money but now won’t pay because I don’t have insurance. However, the contract I signed regarding payment stated insurance must be maintained throughout the duration of the project. It did not say anything about until being paid in full. Can they legally not pay me the remainder of the money in the contract if I held up my
end of the agreement?
Asked on January 19, 2018 under Business Law, South Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Based on what you write, they have no legal basis to not pay you: if the contract required insurance throughout the duration of the project, that would generally be taken by a court to mean until your work on project is done, and not until all payment is complete. Therefore, you should be able to sue for "breach of contract" for not honoring their obligation to pay you for the work you did. Furthermore, under the doctrine of "unjust enrichment," the law does not let someone be "unjustly"--or unfairly or inequitably--"enriched" or benefited by getting work which was intended or supposed to be for compensation (i.e. work that had to be paid for, based on the parties' understanding) without paying for it. This provides a second ground or basis for suing, so you should sue for both "breach of contract" and for "unjust enrichment" for your money.
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