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Can you refuse to pay your subcontractor?

On Behalf of | Aug 2, 2022 | Construction Disputes

You are a home improvement general contractor who takes pride in your work. You usually only work with the best subcontractors, but you decided to try someone different.

You now wish you hadn’t because of the poor work quality, and the homeowner is unhappy with you. What are your options in this case? Can you refuse to pay the subcontractor? 

You can’t unilaterally refuse to uphold your contract

In New York, as in most states, if you hire a subcontractor to perform work on your property, you are generally bound by the terms of the contract you signed. If you refuse to pay the subcontractor and their employees for completed work, they could place a lien against your bond or property and/or sue you for breach of contract. 

Generally speaking, you have to try to resolve the conflict within the parameters of your agreement. If the work isn’t finished, that may mean that you would still be obligated to pay the subcontractor for the completed work, but not the rest of the job. If the work is finished but needs to be redone and the subcontractor isn’t willing to make things right, you may have to seek to enforce your agreement through legal action. 

Keep in mind, that you also cannot hold a subcontractor responsible for problems that were outside of their control. If, for example, delays on your end caused problems with your subcontractor’s ability to complete their work, that may leave you without an avenue for recovery.

If you are not happy with a subcontractor’s work and are considering withholding payment, you will want to seek counsel to determine what legal options you have.