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So, I am seeking advice on what to do legally. I have at least $3k of her deposit that I will send her no matter what, but does she have any grounds to take me to court for getting more money from me?
Response 1: It really depends and I cannot make this determination within the confines of this forum. However, if the homeowner is alleging that you did not do the job as agreed and thus she is entitled to more refund, then the homeowner can take the matter to Court if you disagree with the homeowner's calculation.
I have a signed sub contractor agreement with her that states I am not responsible for permits etc. I have her money so just looking for the amount to give back or if I can give her the minimum. I just don't want a court notice in a few weeks.
Response 2: If she is looking for $10,000.00 and you do not think that the documentation warrants it and you have offered to pay her $7,000.00 but she has refused, then you need to let her file lawsuit against you and let the Court decide. However, if you do not want to go to Court on the matter, you can go ahead and pay her what she is asking for.
First and foremost, I cannot tell you what to write on the contract. That would amount to giving you legal advice, which I am prohibited from giving pursuant to the terms of service.
If you decide to pay her what she is asking you to pay, it is prudent to have sign a standard release from further obligation on the contract. This is generally in the form of "by receiving and cashing the check, so so and so agrees to release XYZ and his successors and assigns from any further claim relating to the contract now and forever... The release of liability is enforceable. Click on the link below to see sample releases: