The project is finished, or perhaps only partially finished, and you've received an invoice that doesn't match what you were expecting. It might include items you didn't authorise, charge for work you don't think was completed to standard, or simply be higher than the agreed contract sum with no explanation. Before you either pay under protest or refuse to pay entirely, there are some important steps to take.
First Steps: Document and Assess
Before you respond to the invoice at all, review it carefully against your contract, your specification documents, your payment schedule and your approved variation orders. Go through line by line and mark each item as either: agreed and completed, agreed but not completed, not agreed, or disputed.
What you're trying to establish is which part of the invoice is legitimately owed and which part isn't. Most invoice disputes aren't all-or-nothing: there's usually a genuinely owed amount, some disputed items, and possibly some items that should be deducted for defective or incomplete work.
Responding to the Invoice in Writing
Write a formal response to the invoice. Don't just ignore it or respond verbally. Your response should:
- Acknowledge receipt of the invoice
- State clearly which amounts you accept, which you dispute and why
- Reference the contract, specification and variation orders that support your position
- State your intention to pay the undisputed amount promptly
- Set out what you need from the contractor before the disputed amounts can be resolved: further documentation, remediation of defects, or a meeting to discuss
Pay the undisputed amount. Do not withhold legitimately owed money as leverage on the disputed items: that's likely to damage your legal position and turn a manageable dispute into a larger one.
Challenging Unauthorised Extras
If the invoice includes work that was not covered by an approved variation order, you are under no obligation to pay for it. Extra work carried out without prior written authorisation and agreed pricing is not a valid claim against you, regardless of whether it was in fact done.
Your response should state clearly: "The following items were not authorised by a variation order or agreed in writing before the work was carried out. We do not accept liability for these charges." Reference the contract provision that requires written authorisation for variations.
This is why variation orders matter: Without a documented process for approving additional work, you're in a word-against-word dispute over what was agreed. With signed VOs, the contractor's ability to add unauthorised extras to your bill is effectively removed.
Deductions for Defective Work
If there are items of defective or incomplete work that haven't been remedied, you may be entitled to deduct the reasonable cost of remediation from the outstanding sum. This is not an opportunity to claim for improvements or changes of mind: it's limited to work that genuinely doesn't meet the contractual specification.
Get an independent assessment from another contractor or a building surveyor of the cost of remediation. That's the figure you deduct, and you should be able to support it with documentation. Arbitrary deductions without supporting evidence will not hold up to scrutiny.
If the Contractor Threatens Court Action
This is stressful but it's not the emergency it can feel like. A threat to "take you to court" doesn't mean proceedings have been issued. Before any court claim can proceed, the Construction and Engineering Pre-Action Protocol requires the claimant to write formally setting out their claim, and give you time to respond. You should receive a detailed letter before action before anything is filed.
When you receive a letter before action, take it seriously and respond in writing within the timeframe given (typically 14-28 days). Set out your position clearly, with supporting documentation. If the amount is over £10,000 or the legal position is complex, this is the point to get a solicitor involved.
For claims below £10,000 in England and Wales, the Small Claims Court process is accessible without legal representation. The court takes a dim view of parties who don't attempt to resolve disputes before issuing proceedings, so a documented record of your attempts to communicate and resolve the matter is important.
The Credit Card Protection Point
If you paid any part of the invoice by credit card, Section 75 of the Consumer Credit Act 1974 gives you a right to claim against your card provider for breaches of contract by the contractor, for purchases between £100 and £30,000. This is joint liability: the card issuer is as liable as the trader. For deposits paid on card that the contractor has refused to refund, this can be an effective and relatively quick resolution.