You have performed work or delivered goods, but your customer refuses to pay due to alleged defects. For many entrepreneurs, this is a familiar and frustrating situation. The invoice remains unpaid, while you believe that you have delivered correctly.
The question then is: may a customer suspend payment due to complaints, and if so, under what conditions? In this article, we explain what your rights are, when suspension is permitted, and what steps you can take to get paid after all.
When may a customer suspend payment?
A customer may only suspend payment if there is a real, demonstrable, and substantial defect that is directly related to the work or product delivered.
This means that:
- the defect must have been reported in a timely manner;
- the complaint must be sufficiently specific;
- the defect must be serious enough to justify withholding payment.
In practice, however, we see that customers often interpret these rules broadly – or misuse them.
Common misconceptions about suspension
Not every complaint entitles you to suspend payment. Frequently heard, but legally incorrect, arguments are:
- “I am not completely satisfied”;
- “It could have been done differently”;
- “I don’t have the money for it right now”;
- “We’ll discuss this later”.
Dissatisfaction is not a defect. Minor deviations or subjective opinions do not justify a complete refusal of payment.
What if the work was largely done correctly?
Even if there is a defect, this does not automatically mean that the customer does not have to pay at all.
In many cases:
- payment may only be partially suspended;
- the contractor must be given the opportunity to remedy;
- the customer must cooperate in finding a solution.
A complete refusal to pay is then legally untenable.
What role does the contract play?
In a dispute over payment, the contract is crucial. Check, among other things:
- the description of the work;
- completion agreements;
- payment terms;
- complaints procedures;
- general terms and conditions.
Oral agreements can also be binding, but evidence is especially important in that case.
What should you do immediately if payment is refused?
1. Ask for a specific justification
Have the customer specify exactly:
- which defect is alleged;
- when this was identified;
- why this justifies withholding payment.
2. Offer to remedy (if reasonable)
By offering a remedy, you show reasonableness and strengthen your legal position.
3. Put everything in writing
Ensure that all communication is confirmed by email. This is essential if legal proceedings follow.
When is there a breach of contract by the customer?
If you have delivered correctly and the customer does not pay without a valid reason, this constitutes breach of contract.
You can then:
- enforce payment;
- claim statutory interest;
- claim collection costs;
- take legal action.
Business disputes and debt collection
In many cases, a formal legal approach leads to payment without the need for a judge.
Read more about our approach to commercial debt collection and within the business law.
International clients and defects
With international clients, invoking defects can be especially complex due to differences in law and language.
You can read more about this at international debt collection in the Netherlands.
Costs and litigation funding in payment disputes
In disputes over non-payment, we generally do not work on a no cure, no pay basis.
But importantly: in many payment disputes is litigation funding possible.
We work with an independent litigation funder who, after assessing your case, may decide to:
- pay all attorney fees;
- pay the court fee;
- to bear any expert fees.
If litigation funding is granted, you as the client ultimately pay nothing. The litigation funder bears the full financial risk.
About the author
This article was written by Onur Arslan, attorney and founder of Arslan Advocaten. He assists entrepreneurs in payment disputes and business conflicts.
