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When Can Someone Legally Refuse Payment to a Business For Poor Service?

The legal standard for services performed is different from the standard adopted by the Uniform Commercial Code that is applicable to the sale of goods. With respect to services rendered, an important question to ask is how badly was the service in fact performed, and what type of service contract does the particular situation involve. For instance, was the service so poor or variant that it amounted to near non-performance? As a general rule, under the common law adopted by many jurisdictions, substantial performance or conformity is all that is required. As long as the party in question has substantially performed, that party will not be deemed to have materially breached the agreement. The consequence of this is that while an injured party, such as the payor, can recover damages regardless of whether the breach in performance is material or not (whether or not there was substantial performance), only a material breach excuses the injured or aggrieved party from performing or paying for the services rendered. It should be noted that while a material breach allows the aggrieved party an immediate right to all available remedies arising from breach of contract, the party who materially breached may still be able to offset from the other party’s recovery an amount that would otherwise result in unjust enrichment, or the reasonable value of benefits conferred. An exception to this rule occurs when payment is made on a per unit basis, such as with installment contracts. In that situation, the breaching party may be able to recover the contract price for any unit upon which it has substantially performed. If the contract includes an acceleration clause making the entire payment amount due upon occurrence of any late payment, the performing party could possibly recover the whole amount.

To ascertain whether a breach is material, courts look at the amount of performance rendered by the breaching party prior to, and the benefit(s) obtained by the non-breaching party at the time of the breach. Other considerations include compensation, certainty of future performance by the breaching party, intentionality, hardship to the party in finding material breach, impact of contractual provisions governing the obligations between the parties and other considerations relevant to the specific circumstances. As a general rule, if the breach is such that it significantly tears into or negates the heart or essence of the agreement, there is a good chance that the breach will be considered material. It should also be noted that as long as performance is rendered within a reasonable time, any failure to perform within the time stated in the contract generally will not constitute a material breach, - unless the terms or nature of the contract make timely performance essential (by for instance, expressly providing that the “time is of the essence”). Finally, a breach could become material if the party committing a minor breach declares in advance that he or she will not perform his or her end of the bargain when it comes time to perform (this legal doctrine is known as anticipatory repudiation).

It is important to remember that while these general principals are applicable to common law jurisdictions, statutory modifications, regulations, legal doctrines and the contractual terms between the parties can substantially add or alter these principles, including the common law requirement that services be rendered in a “workmanlike manner.” For example, contracts for sale of business or land, employment contracts, government contracts, or construction agreements may have different governing rules specific to each industry and jurisdiction. In addition, certain agreements must be in writing in order to be enforceable. It is therefore important to consider each specific situation carefully and on individual bases.

In addition to the above, there are also practical considerations. For instance, the cost of litigating who is right in a breach of contract case can be substantial, and depending on the particular situation at issue, including availability of evidence, may not justify incurring legal risks and costs, an adverse credit rating, or placement of a lien arising from failure to pay. Therefore, since different circumstances and facts are inherent in every individual situation, a Florida licensed business attorney should be retained to ascertain the applicable federal, state, regulatory, and common laws, including any contractual obligations, to determine the appropriate course of action.

Note: Above content is a simplification and a brief overview provided for informational purposes only. J. Allen Law PL makes no guarantee of the accuracy of completeness of the information provided here, and shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Additional considerations and exceptions could be applicable to your specific circumstances. It is therefore not intended and does not replace the advice of an experienced business litigation attorney in central Florida. You are urged to seek professional advice before making any decisions.

Contacting our Breach of Contract Attorney

If you need a breach of contract attorney in Orlando or anywhere in Central Florida, please contact Orlando attorney Jonathan K. Allen. Breach of contract issues are frequently complicated and need to be handled by an experienced business attorney to ensure that your interests are properly protected. Mr. Allen have helped many business owners in the past and would be honored to help you to. Call us today at (407) 205-2330 or fill out the online form provided on this page and we will contact you shortly. We value your privacy and will keep any information you provide strictly confidential.

Please feel free to visit our breach of contract page for detailed information on breach of contract under Florida Law.

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390 N. Orange Ave, Suite 2300, Orlando FL 32801 * Main Phone: (407) 205-2330 * Direct Phone: (407) 205-2330 * Fax: (407) 442-0679

Disclaimer: This website is an advertisement by the Law Firm of J. Allen Law P.L. This advertisement is not intended nor shall it create an attorney-client relationship between you and this law firm or any attorney for this law firm. Nothing contained in this advertisement constitutes legal advice or guarantees any result. In addition, neither J. Allen Law P.L. nor its attorney(s) guarantee the accuracy or completeness of the information provided here, and shall not be liable for any errors or delays in the content, or for any actions taken in reliance of this information. Any content provided on this website is for informational purposes only and should not be relied upon and is not intended to be a ‘shortcut’ to replace the advice of a knowledgeable and experienced attorney. It is therefore strongly recommended that you consult with your legal counsel before making any decision. Finally, no tax advice or opinion has been intended, rendered or expressed on this website. Tax matters should be consulted expeditiously with reliable tax professionals. This firm has endeavored to comply with all known legal and ethical requirements in compiling this ad.