Withholding payment to a contractor: what sum can you reasonably retain?

1. First check whether payment is due

Read the instalment schedule against actual progress. Payment may depend on a particular phase. If not reached, the first question may be whether payment is due rather than whether it can be withheld. Collect photographs, planning and exact milestone wording.

Separate invoices and assignments. A dispute about one separate job does not necessarily justify withholding for another. Request details of unclear descriptions and record objections. Ignoring an invoice does not help explain which obligation you disputed and why you considered its milestone unmet.

2. Link withholding to a specific failure

Describe agreed work missing or defective. Compare location, contract and evidence. General loss of confidence is less useful than a demonstrable missing part or investigated defect. Show what obligation you still require; withholding is not a separate punitive discount for disappointing cooperation.

In ECLI:NL:GHDHA:2026:6, the Hague appeal court discusses examining a due counterclaim and justified extent of withholding, among other matters. The measure may exert pressure and provide security, but is not thereby final compensation. Have the lawyer explain your particular basis.

3. Support the relationship between defect and sum

For partial or defective work, the failure must justify withholding, as the cited judgment also explains. Calculate an amount linked to the actual problem. A technically supported estimate helps but is not automatically final damages or a mandatory identical amount for every retention.

Separate necessary repair, completion, improvements and consequential loss. Do not inadvertently use a quotation for new or better work as a repair budget. Ask what uncertainty remains across defects. An unexplained round percentage of the whole price is difficult to defend. Pay undisputed sums according to the assessment and explain the temporarily retained part.

4. Do not confuse withholding with a compulsory default notice

The judgment says withholding does not require the other party already to be in legal default. This differs from possible later termination or certain damages claims. Do not use a general rule requiring fourteen days before anything can happen to payment. Assess actual basis and circumstances.

A clear written repair request remains practically important. Allow the contractor to understand the complaint and discuss reasonable scheduling. Explain what is requested and its link to the retained sum. Later final termination or third-party repair needs separate assessment of its own conditions.

5. Explain your payment position in writing

Identify invoice, paid and retained parts and specific problem. ConsuWijzer recommends written reasons for partial withholding. Attach documents and request solution or substantiated reply. Keep sent version, payments and calculation together so it is clear you deliberately used a particular measure rather than forgot payment.

Give a contractor’s threatened stoppage immediately to your adviser. It may have its own payment position; your letter does not automatically resolve mutual dispute. Assess temporary continuation with a clear agreement. Do not sign a broad admission of the entire invoice while giving reasons for disputing part.

6. Discuss payment under protest and formal papers separately

ConsuWijzer describes payment under protest where non-payment causes serious practical problems. This does not automatically establish an undue invoice. Clearly state disputed part and why you nevertheless pay, and assess actual recovery rights. The heading alone replaces neither a legal file nor timely next action.

A collection letter or summons needs its own response. Forward formal papers with receipt date immediately. Keep correspondence proving the contractor knew your objection. Do not assume an earlier protest email removes all procedural steps. The lawyer can assess withholding, counterclaim and proceedings together.

7. Fictional example: missing staircase near completion

Suppose renovation is largely complete but the agreed staircase is absent and a finish defective. The client wants the whole final instalment plus an older paid invoice back, without a repair estimate. The contractor admits the missing staircase but disputes the finish.

Separate missing performance, disputed defect and sums. Then assess appropriate temporary retention and further information needed. This fictional example sets no actual amount. It shows why labelling matters “completion points” does not justify every payment measure desired.

8. Checklist for retention advice

First ask about whether payment is due, the basis and amount. Then discuss repair and continuing communications. Immediately flag announced stoppage or proceedings so the response fits practical planning.

• Contract, instalment schedule and complete invoice.
• Present progress, defects and relevant agreements.
• Photographs, expert findings and repair/improvement breakdown.
• Payment overview and reasoned retained-sum calculation.
• Repair requests, contractor replies and collection/court papers.