STONE LLP
Breach of Contract & Non-Payment

When an Owner Breaches by Refusing to Pay

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When a property owner or developer fails to pay for completed construction work, the contractor’s core claim is breach of contract for the unpaid balance, usually paired with common counts such as account stated and quantum meruit. California allows recovery of prejudgment interest, and attorney’s fees where a contract clause or statute provides them. This claim runs alongside lien, stop-notice, and bond remedies.

The claim behind the collateral

Mechanics liens and stop notices secure a debt, but the debt itself rests on the contract. The breach of contract claim is what establishes how much is owed and why, and it survives even where a lien deadline has passed or the security has been bonded around.

On a commercial project, nonpayment usually takes one of a few forms: an owner who simply stops paying approved invoices, one who withholds final payment and retention at closeout, or one who manufactures a dispute over defects or backcharges to justify keeping funds. The legal response differs in detail but starts from the same place — proving the work, the agreed price, and the shortfall.

Claims that typically travel together

A nonpayment complaint is rarely a single count. Depending on the facts, it may include:

  • Breach of written or oral contract — the primary claim for the unpaid contract balance, including approved change-order work.
  • Common counts — open book account, account stated, and reasonable value (quantum meruit) provide alternative paths to the same recovery, which can matter when contract terms are disputed or the work went beyond the written scope.
  • Statutory payment and penalty claims — prompt-payment penalties and, where applicable, lien, stop-notice, and bond claims layer additional leverage and fee exposure onto the contract claim.

What you can recover

Beyond the unpaid principal, California law often allows prejudgment interest on a sum that is certain or readily calculable, which compensates for the delay in payment. Where the contract contains an attorney’s-fee clause, California makes that clause reciprocal by statute, so a contractor forced to sue to collect may recover reasonable fees if it prevails. Several construction payment statutes carry their own fee-shifting provisions as well.

Don’t let the limitations clock run

Breach of contract claims have their own statutes of limitation — generally four years for a written contract and two years for an oral one — separate from the much shorter lien and notice deadlines. Acting early keeps the full range of remedies open and avoids arguments that a claim or a lien right was allowed to lapse.

Useful authorities

Reciprocal attorney’s fees: Civ. Code § 1717. Prejudgment interest: Civ. Code §§ 3287, 3289. Limitations: Code Civ. Proc. § 337 (written, 4 years), § 339 (oral, 2 years).

How Stone LLP approaches nonpayment

Stone LLP treats the contract claim and the statutory remedies as one coordinated strategy, using the security tools to create pressure while building the breach case that determines the number. The firm has represented California businesses in commercial disputes for 45 years from Irvine, Century City, and San Jose, with a focus on significant private-works disputes.

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Frequently asked questions

An owner approved my invoices but won’t pay. What is my claim?

That is a classic breach of contract for the unpaid balance, often supported by an account stated (the parties agreed on the amount) and other common counts. Statutory penalty and lien remedies frequently apply on top.

Can I recover my attorney’s fees?

Often, yes — if your contract has an attorney’s-fee provision (California makes it reciprocal) or if a prompt-payment or other statute with its own fee-shifting provision applies to the withholding.

What if there was no signed contract?

You may still recover. Oral contracts are enforceable, and quantum meruit allows recovery of the reasonable value of labor and materials furnished, though the limitations period for oral contracts is shorter.

How long do I have to sue for nonpayment?

Generally four years on a written contract and two years on an oral one. Lien and notice deadlines are far shorter, so those usually drive how quickly you should act.

Should I sue or try to settle?

Often the strongest settlements come after payment-security rights are preserved. Stone LLP can explain how securing the claim first affects leverage. Call 949-477-9100.

Talk to Stone LLP about getting paid

Deadlines on California payment claims are strict. The sooner you call, the more options stay open.

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Call 949-477-9100