If stated in a contract would we be able to repossess material furnished to complete a job if payment is not made in full?

Asked on October 27, 2015 under Business Law, Arizona


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If the contract has that provision, material could be repossessed; however, that provision would be narrowly construed.
For example, if the contract is divisible (performance of the contract can be made in lots instead of all at once) and material was furnished and part of the job was done for which the customer paid, future non-payment would not breach the entire contract.  It would only be applicable to each part of the construction or whatever the part of the contract entails.  So, material could only be repossessed which represented the unpaid portion of the work.
If material has been furnished and used in performance of the contract, it would not be feasible to dismantle the work and retrieve the material.
If full payment has not been received, but partial payment has been made and if the contract is divisible, only unused material representing the portion of the contract for which payment has not been made would be subject to repossession.
A lawsuit for breach of contract / account stated can be filed against the customer for failure to pay.

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