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Can I withhold payment for bad workmanship? Legal dos and don’ts

When you hire a tradesperson or contractor, you expect the work to be carried out to a reasonable standard, but what happens if the quality is poor, incomplete, or defective?

Can you legally withhold payment, or could doing so put you at risk of a claim?

The answer depends on several factors, including the terms of your contract, the severity of the defects, and whether you have given the contractor a fair opportunity to rectify the issue.

When withholding payment is justified

Withholding payment is not a decision to take lightly, but in certain situations, it may be necessary to protect yourself from financial loss.

If you withhold payment unfairly or without proper justification, you risk breaching the contract yourself.

Below are some common scenarios where withholding payment may be legally justified.

Clear breach of contract

If the work does not meet the agreed specifications or is below the standard expected of a reasonably competent tradesperson, this may constitute a breach of contract.

In such cases, withholding payment may be justified.

Defective or incomplete work

If the work is incomplete or has clear defects, you may be entitled to withhold some or all of the payment until the issues are rectified.

However, you must first provide the contractor with an opportunity to remedy the problem.

Retention clauses in contracts

Some contracts contain retention clauses that allow a portion of the payment to be withheld until the work is completed to a satisfactory standard.

If your contract includes such a clause, you can legally withhold the agreed amount.

Statutory rights under the Consumer Rights Act 2015

For work carried out on residential properties, the Consumer Rights Act 2015 (the Act) requires that services be performed with reasonable care and skill.

If a tradesperson fails to meet this standard, you may be entitled to a price reduction or even a refund for the work.

When withholding payment could backfire

While it may seem like a straightforward way to deal with poor workmanship, withholding payment without proper justification can create legal and financial risks.

Contractors may dispute your claims, argue that payment is due under the contract, or even take legal action against you.

In some cases, an unjustified refusal to pay could leave you liable for breach of contract, interest on unpaid sums, or even additional legal costs.

No written contract or agreed terms

If there is no contract specifying payment terms and the circumstances under which payment can be withheld, the contractor could claim that you are in breach of contract by refusing to pay.

Failure to follow the dispute resolution process

Many construction and service contracts include a dispute resolution procedure that must be followed before withholding payment.

Ignoring this process could weaken your legal position.

Risk of legal action

A contractor may take legal action against you for non-payment. If they are successful, you could face a County Court Judgment (CCJ), which may affect your credit rating.

Withholding an excessive amount

Even if the work is defective, you should only withhold a reasonable sum reflecting the cost of rectifying the issues.

Withholding the entire payment when some of the work is satisfactory may be seen as unreasonable and could result in legal consequences.

What should you do instead of outright withholding payment?

Communicate with the contractor – Raise your concerns in writing and allow them a reasonable opportunity to rectify the defects.
Obtain an independent assessment – If the contractor disputes your claims, consider hiring a surveyor or industry expert to assess the quality of the work.
Negotiate a partial payment – If parts of the work are satisfactory, consider proposing a reduced payment that reflects the value of the defective or incomplete work.

Withholding payment for bad workmanship may be justified in some circumstances, but it must be done carefully to avoid legal risks.

If you are in a dispute over poor workmanship, seeking legal advice early can help you deal with the issue and protect your position.