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When construction is halted or the contract is terminated mid-project, many contractors wonder whether they can still claim payment. The short answer: yes, in most cases.

[Table of Contents]

1. Claiming Payment Based on Work Completed

2. The Right of Retention (Lien)

3. Can a Client Refuse Payment Due to Defects?

4. How Defect Repair Costs Affect Payment

5. What to Do If You Have a Construction Payment Dispute

Claiming Payment Based on Work Completed

If construction has progressed significantly and the completed portion benefits the client, the contractor may claim payment proportional to work completed (giseong-go). Courts typically treat the completed portion as valid, treating only the incomplete portion as voided under the contract.

The Right of Retention (Lien)

If the contractor has a valid payment claim and is in actual possession of the construction site, they may exercise a right of retention (유치권). Requirements: (1) actual possession of the site, and (2) a due and unpaid claim arising from the site. Note: losing possession extinguishes the lien, so leaving the site without receiving payment is legally risky.

Can a Client Refuse Payment Due to Defects?

No. The right to claim construction payment and the right to claim damages for defects are legally separate rights. A client cannot withhold the entire payment simply by claiming defects exist.

How Defect Repair Costs Affect Payment

If defects are proven and repair costs are quantified, the client may seek offset or set-off for that specific amount. The key question is not whether defects exist, but how much the defect-related damages amount to.

What to Do If You Have a Construction Payment Dispute

Early action is critical in construction payment disputes. Lien timing, provisional attachment, and cost assessment are all complex. Consult the construction law attorneys at Cheongchul Law Firm.

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This post is for informational purposes only and does not constitute legal advice. Please consult a qualified attorney for your specific situation.