Payment disputes are one of the fastest ways for a construction project to unravel. When a client’s payments suddenly stop, many contractors begin asking the same question: Can they legally stop the work and walk off the job?
In Florida, the answer depends heavily on the construction contract, the timing of the dispute and the specific circumstances involved. If you’re in this situation, you may have legal remedies for your payment problems, but leaving without following the rules outlined in your contract can have serious legal and financial consequences. Here is what you need to keep in mind:
The Contract Generally Controls The Situation
The first place you should look is the construction agreement itself. The contract language should address payment obligations and suspension rights, and that will likely dictate your options. The wording of these provisions can significantly affect whether stopping work is legally justified. Some questions that must be asked include:
- Does the contract have a valid, unambiguous “pay-when-paid” or “pay-if-paid” clause? If so, that can affect your right to stop work, at least for a certain time or until certain notices have been given.
- Is there a stoppage or suspension provision? Some contracts specifically address what happens when payments aren’t made on time. A stoppage or suspension provision may allow you to slow or stop performance outright after you give the owner a chance to cure the default.
It can be difficult to understand exactly what your rights are until the contract as a whole has been evaluated, particularly if you’re involved in a large project. Contracts typically seek to limit the ability of contractors and subcontractors to walk away from a job for any reason. One party leaving a job can trigger a chain reaction that affects inspections, financing, other subcontractors, occupancy deadlines and more.
Walking Off a Job Always Creates Legal Risks
No matter how frustrated you are by the nonpayment, assuming that you can simply abandon the project can end up leaving you with substantial legal and financial liabilities:
- You could endanger your business license. Under Florida Statute § 489.129, the abandonment of a project without justification can result in disciplinary measures by the Florida Department of Business and Professional Regulation.
- You can be sued in civil court for breach of contract. If the owner is successful, you could be made to return deposits or advance payments you already received, cover the additional costs for a replacement contractor and pay for damages tied to the project’s delay.
Ultimately, your first move should rarely involve the “nuclear” option of walking away from a job because of payment concerns. Start with clear documentation, a careful review of the terms outlined in your contract and – if you are wise – a consultation with a skilled construction law attorney. That way, you can fully understand your rights, obligations and potential risks, before you make a move.