What could we do if we are forced to sign an agreement before full payment? 2 Answers as of July 01, 2015

We are building a home for a customer and have fulfilled our agreement in order to get a fourth payment. Although our contract states that the payments should not be held up without a legitimate cause, our customer refuses to pay the amount due unless we sign a new mediation agreement adding specific items to the contract. We estimate these items to cost around $3,000. The amount of the payment due is $47,000 and our subcontractors are waiting to get paid. Unless we get the payment, we will be put far behind in our obligations. We feel that we have no choice but to sign the new agreement. We are also afraid to finish the home once we get the check for fear of her not paying us the final payment. We want to finish the home and get this over with without the worry. What can we do?

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S. Joseph Schramm | Joseph Schramm
You basically have a person tying to exercise some leverage based on your need for timely payments. You can refuse to sign the mediation agreement and, if the person refuses to release the payments, you can file suit. However, this will not get your subcontractors paid in the meantime. However, if the customer is not willing to pay you any extra money for signing the new mediation agreement, then the agreement would be unenforceable as not being supported by consideration. Therefore, you might consider signing the agreement, receiving your payment, finishing the job and, should the customer try to withhold any further payments and invoke the new mediation agreement, you can proceed under the terms of your original mediation agreement to pursue the funds due you, arguing that the new mediation agreement was unenforceable because you did not receive any additional money (i.e. consideration) in exchange for it.
Answer Applies to: Pennsylvania
Replied: 7/1/2015
Edelman, Combs, Latturner & Goodwin, LLC | Daniel A. Edelman
1. If you sign the new agreement you are most likely stuck with it. 2. You have rights under the mechanics lien act. Have an attorney review the facts so the lien is properly perfected.
Answer Applies to: Illinois
Replied: 6/30/2015
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