Can a company withhold payment for a completed job that has a signed contract?

UPDATED: Oct 1, 2022

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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