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What can you do when a client doesn’t pay an invoice?

On Behalf of | Jun 13, 2023 | Business Law

Knowing how to handle clients who don’t pay can be one of the trickiest parts of running your own business. You’ve probably heard every excuse under the sun for why payment is running late or they might tell you that they simply aren’t going to pay you. 

Without a genuine reason for withholding payment, you shouldn’t have to battle and debate over being paid for work you’ve done. So, what are your options? 

See if the client is willing to work with you 

There may be a genuine reason why payment isn’t forthcoming. For example, the client may be waiting for payment from a third party before they can afford to pay you but they’re too embarrassed to tell you. If it’s a relationship you’d like to preserve, it may be worth looking to negotiate a delayed payment or a repayment schedule that suits both of you. 

Always go back to the terms of the contract 

It’s easy to underestimate the power your contract holds. It’s your most effective tool to use in dealing with payment issues and so it should be your first place to start. It sets out (in writing) the terms you both agreed upon at the outset and it offers you a legal basis on which to take action if a client refuses to pay following unsuccessful negotiations. You can issue a claim in civil court against the client for the money you are owed. 

The court has a wide range of options at its disposal 

The civil courts can demand that the client pays you what’s due. Alternatively, it can request a mechanic’s lien or a construction lien, which guarantees that the client will pay you at a later date.

Thankfully, the law affords you rights as a contractor in situations where you are not paid what you are owed. Seeking legal assistance as soon as you can is crucial because there are tight time limits in place if you need to make a claim.