Can a company legally withhold payment to a vendor after services have been rendered?

UPDATED: Oct 2, 2022

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Can a company legally withhold payment to a vendor after services have been rendered?

My company an LLC was previously under contract with another in which they contracted with my company to provide services and payment was determined by commission earned and fee-for-services rendered. After submitting the final invoice in the course of terminating the contract, the company claimed it was not going to pay the final invoice until a complete

Asked on October 5, 2019 under Business Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, legally, they cannot simply decide to withhold payment, even if the want to or claim they are going to do an "audit and investigation": they must pay you in the time frame indicated in the contract. If they don't pay you, your recourse is to sue them for "breach of contract"--for violating their contractual obligation to pay--for the money.

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