Can a vendor legally hold money owed to a subcontractor on one contract with a second contract?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can a vendor legally hold money owed to a subcontractor on one contract with a second contract?
We recently made arrangements to return some parts to a vendor from a job completed a month ago. We had to locate parts and sent verbal agreement we would send parts ASAP. We always honor our word. We are currently owed for a separate job completed a month ago, we have a 14 day net agreement, the invoice was due July 1st. When we asked about the payment on second job, we were told it was being mailed out. Now, 2 weeks later, we still don’t have payment and when we asked again about the payment and told they would be holding on to the payment until they received the parts requested. I have been told you can’t cross contract payments like that?
Asked on July 16, 2015 under Business Law, Georgia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
You *can* "cross contract payments," but only IF the contract(s) between you and the vendor specifically stated that this could be done--that is, there is nothing inherently illegal about it, but it must be reflected in an explicit understanding or agreement between the parties, reflected in a contract, between the parties. If there was no such agreement, then the normal rule or expectation, that each contract is separate (and must be paid separately) would apply.
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 AttorneyPages.com 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.