If I own a construction business and a customer has not paid the amount due that it states in our contract, what action can I take?

UPDATED: Feb 8, 2012

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If I own a construction business and a customer has not paid the amount due that it states in our contract, what action can I take?

We have a contract that we drew up at the beginning of the project before any work was started or any payments were received outlining the payment arrangements. The project has been completed and now the remaining amount is due. The customer has yet to pay the amount due and when we attempt to collect he says he doesn’t have the money. What action can I take at this point?

Asked on February 8, 2012 under Business Law, Kansas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You don't have to take the customer's claims of poverty at face value--or even if they are true, decline to take action due to them.

You can and should sue the customer if he won't pay; for smaller amounts, sue in small claims court, representing yourself, while for larger amounts, you would hire a lawyer. You will sue on the basis of breach of contract and also unjust enrichment (he received value, the work done, without paying for it).

Assuming you win, you will get a judgment in your favor. If he still does not voluntarily pay, a number of different mechanisms will be available to you to collect, such as putting a lien on real estate; leving on (taking money out of) a bank account; executing on (forcing the sale of) personal property, like a boat or car; and/or garnishing wages.

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