Can my customer, who will not let me complete the work, hold my tools for collateral if I have already been paid in full but not allowed to complete the job?

I started a remodeling job or my customers and due to some personal and financial issues I had to ask them to pay me the rest of the money before the job was complete. For the same personal and financial reasons, I was unable to work on the project for several weeks though I did keep in touch with the customer letting them know I was not running out on them. When I return to complete the project, we customer said they did not want me to work for them anymore and had already hired somebody else to finish the work and wanted a portion of the money back for the work it was not completed and is holding my tools for collateral. Can they legally do this?

Asked on March 16, 2018 under Business Law, Arkansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

No, they cannot hold your tools for collateral unless you gave them the right to do so: e.g. executed some agreement making the tools collateral for some debt or amount of money. Otherwise, it is theft to take or hold someone's property without permission: you can try filing a police report, to see if the police will help, and/or sue for the return of the tools or for their value.
You will have to give them their money back, however: if you did not do the work, you cannot keep the money, and they were within their rights to consider their agreement with you terminated (to take you off the project) when you were "unable to work on the project for several weeks"--your "personal and financial reasons" are not the customer's problems, and did not entitle you to stop the remodelling job. They had no obligation to accommodate you by giving you more time or letting your take a break from the work.
The best way to resolve this is to repay the money for that part of the  work you did not complete in exchange for getting your tools back. If you don't return the money, they can sue you for it.


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