My friend, Jay, told me that Tim (who Jay and I both know) bid and received the contract to install all the data, phone and cable lines in a new apartment complex. Jay told me that he was going to help Tim when he could. Tim had alot of work with this contract and needed more help. Jay told Tim that he would talk to me and see if I could help out. I knew Tim from years eariler, we were both in the telecommunications field. Tim called me and told me what he had going and asked if I would be able to work with him to get this project completed. My business was slow at the time so I said sure I can help you. I asked him the price he would be paying to us (Jay and me). He gave me the prices (ie: per line pulled, per splitter installed...piece work prices). We agreed on the rates. This project went for over two months (June 1-Aug 5) We worked LONG days....sometimes not getting home until 11:00PM. I personally have not received a dime from this guy yet. The payout cycle was suppose to be 30-35 days. Through text message (2 nights ago) he said he would be sending me a check the following day, we'll see if it comes today. The check that is suppose to be coming will only be for 10% of what he owes me (that is IF it even comes). Tim now says that he is NOT paying us any more money until 1. We agree that he can keep 2% of our earnings because he had us on his liability insurance (even though he never asked for our own certificates of liability, Jay and I have our own) 2. We agree that we will pay our own taxes (1099), which is fine with us, even though he never stated that before we started working for him. and 3. We agree that he can keep 10% of our earnings as a retainage incase some of the lines don't tone out (work correctly)......and HERE'S THE BIGGIE >>> Sign a subcontractors agreement concerning the work to be done with charge-back clauses and other incidentals for him to keep more of our money this is AFTER all the work has ALREADY BEEN COMPLETED! He owes us right around $10,000 for the labor we gave him to help him complete this project. Any thoughts would be appreciated.....especially if you've been in this situation or have legal knowlede concerning business contracting and agreements.Thanks!
Do not negotiate (or renegotiate) with terrorists or assholes. Collect all the correspondence you have with him and start preparing to sue him. I would cut off all contact with him except through email and then I would only write to him in an attempt to get him to admit he owes you money so you can use that as evidence.
You should insist on a contract or purchase order before starting work. In the real world, subs do make exceptions if it's someone they trust, but it can come back to bite you. If push comes to shove, threaten to file a mechanic's lien (or construction lien) if he doesn't pay up by a certain date. The owner will get a notice if you actually have to do that. You probably should do this quickly. Most states/counties give a time limit in which to file a lien. I think that will get this guy's attention, especially if the owner hasn't paid him in full.
The lien is filed on the work, not on the person who owes you money, so it's against Tim's customer. They'll pressure him into paying you and getting the lien removed. (If they need to finance anything, it will be costly with the lien.)