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legalgems, Lawyer
Category: Legal
Satisfied Customers: 10284
Experience:  Just Answer consultant at Self employed
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Situation: I am a painting contractor with all necessary

Customer Question

Situation: I am a painting contractor with all necessary paperwork and insurance.
I have done several jobs for one contractor.
He owes me around 20,000 dollars.
We have written estimates and invoices.
And millions of emails/texts.
I used subcontractors on his jobs.
He wants insurance certs for every guy on any of his jobs before he can pay me.
My subcontractors do not have proper insurance.
I am a small company and this is a huge amount due in my eyes.
What can I do?
Submitted: 10 months ago.
Category: Legal
Expert:  legalgems replied 10 months ago.

Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

Expert:  legalgems replied 10 months ago.

Is there anything in the main contract requiring insurance?

Expert:  legalgems replied 10 months ago.

for the subs?

Customer: replied 10 months ago.
I thought my insurance and/or the contractor's insurance would cover my subs. The contractor required insurance, which I had. He did not get specific as to each and every sub having insurance...although he may initially have been implying it because once he asked specifically...which was probably midway through all theses jobs....then he asked for insurance certs for all.
Expert:  legalgems replied 10 months ago.

Thank you for your patience;

So basically, both parties are responsible for ensuring the terms of the contract are complied with. If the contract did not require the subs to be insured, then one party cannot void the contract based on non-insurance as that would not be a breach by the general, since it was not a term of contract. The court will not "imply" a term that is not in a contract in most situations, unless the contract is drafted with vague terms, and then the court will construe any ambiguity against the party that provided the contract, on the theory that they created the issue (vagueness) and thus will pay the price for creating that issue.

Even if a party is in breach, one party cannot withhold payment because that is known as the doctrine of "unjust enrichment". So even if insurance was required, the party would be required to pay per the terms of the contract. If there was an issue created due to the non insurance, then the party that was required to have insurance (ie the general) would be liable for any economic damages resulting from the non insurance issue.

Additionally, under code 176.215, the general is liable for Worker's Comp if there is an issue with a sub that does not have WC insurance so most generals will ensure the subs do have WC insurance.

But in summation, a party cannot benefit from a contract and then refuse to pay due to an immaterial breach of the contract, assuming the court determines that insurance was to be provided per the contract.

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No attorney client relationship is created as this is general legal information, not advice; and a personal attorney should be hired if one wishes specific legal advice for their personal situation.

Expert:  legalgems replied 10 months ago.

Hello again; just checking in to see how things worked out;
if you have further questions please don't hesitate to reach out to me here on Just Answer.