What Happens If You Don't Pay a Contractor for Work Done?

If you're planning on renovating or extending your property, you likely will hire a contractor to supervise the work. The contractor will either do the work himself or hire subcontractors to do it for him; either way, you pay the contractor the agreed rate. In certain cases, you pay the contractor before he starts the job. However, because the cost of a project may shift while it's being completed, contractors are usually paid in full only after the project is completed.

Generally, a contractor sets out his rates beforehand, and the property owner agrees to these rates. Usually, both parties sign a written contract setting out the payment rate. Even if the parties put nothing in writing, the verbal agreement they make has the same legal standing, though it may be difficult to prove in court. Regardless of whether a written contract exists, you're still obligated to pay the contractor the amount of money you agreed.

If a contractor does the work promised, you can't refuse to pay him based on the idea that, because no written contract exists, you lack a legal obligation to do so. However, the situation becomes complicated if you lack a written contract and there is dispute. For example, you may think that the contractor has finished only part of the work, or that his work is unsatisfactory. In this case, the matter must be decided in court.

If you don't pay a contractor, there's a good chance he'll sue you in court for the money that you owe. Even if a written contract doesn't exist, the contractor can still testify that a verbal agreement was made and demand that you pay the money agreed upon. Depending on the amount of money he's seeking, the contractor may file the claim in small claims court or in civil court.

A judge usually hears the lawsuit brought against you and you'll be required to appear in court and present your version of the situation. Both you and the contractor are allowed to present evidence supporting your contentions. The judge then decides if you owe the contractor any money for the work performed and, if so, how much. In lieu of a trial, you may choose to attempt to settle the case out of court.