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WA Part Payment of Invoice - Bound to Get Same Company to Complete Work?

Discussion in 'Commercial Law Forum' started by concernedperson, 21 April 2015.

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  1. concernedperson

    21 April 2015
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    If a business invoiced a customer after completing 1/2 the work and a part payment was applied to the invoice, is the customer legally bound to get that same company to complete the works under commercial law? If they decided to get a different company to complete the work is there any legal standing to sue the customer for outstanding amount of invoice?
  2. Sarah J

    Sarah J Well-Known Member

    16 July 2014
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    Hi concernedperson,

    Are you asking if a customer engaged a company (Company A) to perform some work for them, and Company A performed 50% of the contracted work and received 50% of the total payment, can Company A force the customer to keep them on for the remaining 50% of the work and therefore be entitled to the remaining 50% of the total payment?

    If so, then it will depend on the contract agreed between the parties. If the contract is silent, but it was the understanding of the parties that Company A was engaged to do the full 100% of the work (and there was no break clause) and Company A incurred costs in reliance of performing their end of the contract, then they can sue the customer for breaking the contract if the customer turns around and says they no longer want Company A to perform the remaining 50% of the work and will therefore no longer pay Company A the remaining 50% of the purchase price. Essentially, if the customer terminates the contract with Company A mid-way, then unless the customer has a valid ground to repudiate/terminate the contract, they will be in breach of the contract and Company A will be entitled to sue for the remaining purchase price. Whether or not the customer has a valid ground to repudiate/terminate the contract depends on:
    • What was expressly written in the contract (did Company A fail to meet a material promise in the contract?)
    • What was orally represented by the parties?
    • Nature of the contract and whether Company A's work was significantly below standard
    • Whether there is a ground at law (e.g. under the Sales of Goods Act)

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