Payment Disputes for Services Rendered in Mississippi

Whether you’re in construction, professional services, healthcare or another industry, payment disputes for services rendered are an ever-present threat to your business.

Non-payment by clients and customers who fail to honor agreements for services provided can impact the cashflow of almost any service-based business.

What can you do about it?

If clients have not paid invoices or are unreasonably delaying payments or contesting charges, a qualified payment disputes lawyer can protect your rights and help you take legal action to ease the financial strain and get paid for what you have rightfully earned.

When a client or customer fails to pay for services provided under a contract or agreement, a dispute with the business often arises. The main types of payment disputes result from the following situations:

• Unpaid invoices: when a client ignores invoices or refuses to settle for services already completed.
• Breach of contract: when a client fails to follow payment terms as outlined in service agreements.
• Disputed services: when a client alleges that services have not been fully completed, were completed to a subpar standard or were unnecessary.
• Payment delays: when a client deliberately delays payments beyond agreed deadlines.

The underlying causes of payment disputes for services rendered are usually the following:

• Poorly written contracts: if agreements are not professionally drafted by a contract or business lawyer, the lack of clarity over responsibilities can lead to disputes over payment obligations.
• Change order disputes: if additional services are provided without formal agreements or approvals, these can create problems when the time comes to pay invoices.
• Fraudulent claims: Clients may falsely claim that services rendered did not meet expectations, standards or contractual obligations—simply to avoid payment.
• Economic hardship for clients: delaying payments when services were satisfactorily performed may be a way for a client to deal with financial difficulties.

A payment disputes lawyer will aim to understand the root cause of the dispute so that work can begin on a legal strategy to secure rightful payment for your business—with business litigation a possible avenue to explore.

Payment disputes with clients can financially cripple a business, especially small businesses, contractors, and service providers that suffer frequent cashflow problems. With very stubborn clients, legal action may be required to fully recover what you are owed.

The impact of non-payment can be felt across the business with disruption to cashflow, leading to operational challenges and potential damage to relationships with vendors, suppliers, and employees who may have to wait for payment. Recovering the lost income can also lead to legal and administrative costs for the business.

Sometimes, too, a business requires sub-contractors to complete work. A dispute over payment from the client means that the sub-contractor(s) may also need to wait for payment—and this can prompt further legal disputes. This is another knock-on effect of payment disputes.

Payment disputes for services rendered are addressed under Mississippi business law with several legal tools that can help your business recover payment.

The tool you need will depend on your circumstances but a seasoned payment disputes lawyer will be able to advise the best legal avenue to use:

• Breach of contract claims, which are lawsuits that aim to enforce the terms of a written or verbal business agreement.
• Mechanics’ liens, whereby contractors and subcontractors can file liens on property to secure payment for construction-related services.
• Prompt payment laws, which require timely payment to contractors and subcontractors—with legal remedies for violations.
• Open account claims, whereby businesses can recover debts owed on open accounts under certain conditions.

Your first step to recovering compensation in a payment dispute for services rendered if you are having no luck directly contacting the client for payment should be to discuss your case with a qualified Mississippi business lawyer.

A seasoned attorney will be able to advise on the best legal strategy to get paid for the work you have done. Besides that, consider the following:

• Carefully review the agreement: the text of the service contract or agreement could ultimately decide whether the payment terms have been breached—and your next step.
• Document the dispute: by keeping detailed records, it will be easier for your attorney to compile evidence for a legal claim; write down the services rendered, communications with the client, and payment demands issued.
• Send a demand letter: a formal demand for payment is where legal action starts; the demand letter should outline the precise amount owed and the potential legal consequences for nonpayment.

Your payment disputes lawyer may recommend filing a lawsuit. Most claims are settled without a trial through negotiations or mediation with the client. However, filing a lawsuit sends out a strong message that there will be further legal consequences if payment is not received.

Verbal agreements between a business and a client have legal standing and, according to the Mississippi Supreme Court, oral agreements are generally just as enforceable as written agreements.

However, there are plenty of caveats—and verbal agreements are notoriously difficult to prove if there is no written record of the agreement.

Many payment disputes originate from verbal agreements but it can be challenging for a business to enforce the agreement and be paid. There is no substitute for a clear, written contract when providing services to clients.

Mississippi law states that some contracts must be in writing, namely:

• Agreements for the purchase of goods at a price over $500.
• An agreement for the purchase of real property.
• Agreements to be responsible for another person’s debt.
• Leases of real property for a longer term than one year.
• Any agreement that is not to be performed within a space of 15 months from the time it is entered into.
• An agreement to pay a rate of interest higher than 8 percent per year.

Mississippi businesses should follow the golden rule: always have a written contract properly executed with the relevant signatures. This will ensure that misunderstandings are fewer, the likelihood of non-payment is reduced, and if a payment dispute results, legal avenues exist to recover the missing payment(s).

If you need assistance to settle a payment dispute for services rendered in the Biloxi area of Mississippi, contact Rushing & Guice, PLLC for legal advice and assistance. Call us at (228) 374-2313 or fill out our online form to arrange a limited initial consultation.