Can a Contractor Sue for Nonpayment Without a Contract?
No signed contract. No formal scope of work. Just a handshake, a verbal quote, and a contractor who showed up and did the job. Now there’s a dispute, you haven’t paid the contractor, and they’re threatening to sue.
The question owners ask at this point is always the same; can a contractor sue for nonpayment without a contract? In most states, the answer is yes. Skipping the paperwork did not protect you. It just removed the one document that would have told you exactly where you stood.
This is the lesson a lot of owners learn the expensive way. Every state has some version of a law that sets a deadline for paying a contractor. That includes a verbal deal and gives owners a lawful way to push back when the work is genuinely bad.
As an example, the state of Nevada’s version is a good one to walk through. It shows both sides of the coin; what the contractor is owed, and what the owner is legally allowed to withhold.
Why “No Contract” Doesn’t Mean “No Obligation”
A written contract is a record of what was agreed to. It is not the document that creates the responsibility to pay for work performed. That task happens the moment work is done and accepted, contract or not.
What a missing contract actually removes is leverage and clarity but not liability. Without a scope of work, payment schedule, or change order process, there is no agreed measurement for what “done” or “correct” means.
That matter almost always favors whoever is more prepared to document their position, after the fact. And, that is rarely the owner who decided to skip the paperwork.
This is exactly where prompt payment laws come in. They exist because verbal agreements happen constantly in this industry. Lawmakers had to set a default deadline for owners who never put one in writing.
Nevada’s Prompt Payment Law, in Plain English
Nevada’s version lives in NRS 624.609. Remove the legal jargon and it breaks down into four applied rules.
1. There Is a Payment Deadline, Written Contract or Not
If there is a written schedule, the owner pays by the date in that schedule. If there is no written schedule, or the agreement was verbal, the owner has 21 days. This is from the date the contractor submits a request for payment.
That 21-day clock runs whether or not anything was ever signed.
2. Owners Can Withhold Money — But Only the Right Way
The law does give owners a lawful way to hold back payment. With proper written notice, an owner can withhold:
- The value of any work that was never finished or materials that were never delivered or installed
- The reasonable cost to fix or correct work that does not meet what was agreed to
- Money the owner is already required to pay elsewhere because of the contractor’s own unpaid obligations. This would include things like payroll taxes or workers’ comp premiums tied to that contractor’s crew
There is one more thing the law allows owners to withhold; a retained amount, up to 10 percent of the payment. This can be held back until the job is fully completed. But, that option only exists if a written contract specifically authorizes it.
With no contract at all, that owner protection is not available. Just one more reason skipping the paperwork cost the owner, not the contractor.
This is the part most owners never learn until they are already in a dispute; withholding for bad work is legal. Withholding quietly, with no paper trail, is not.
3. The Written Notice Is Not Optional
To lawfully withhold money, the owner must send a written notice on or before the date payment was due. That notice has to:
- Identify the exact amount being withheld
- Give a specific, detailed reason (stating the relevant contract provision, code, or regulation the work failed to meet)
- Be signed by the owner or someone authorized to act for the owner
A phone call or a text message saying “I’m not paying you, the floor tile isn’t straight” does not meet this standard. Said out loud with nothing in writing, that withholding is not legally protected. This is true even if the owner is completely right about the floor tile.
4. There Is a Process After the Notice Goes Out
When an owner sends proper written notice, the contractor still has options. They can dispute the withholding in writing, or they can fix the problem and send written notice of the correction.
If the contractor corrects it, the owner then has to either pay the withheld amount by the next payment date. Or, object in writing again. The owner needs to follow the same notice requirements as before.
It is a back-and-forth paper trail by design. The law assumes both sides will document their position, and it penalizes whichever side does not.
From the Field: A small business owner held back a contractor’s final payment over a punch list of minor finish items. All communicated verbally over two site visits. The contractor sued. The owner had photos of every issue but no written notice tied to a specific dollar amount. The judge treated the withholding as unjustified. Because, the process, not just the underlying complaint, has to be followed. The owner was right about the work and still lost.
This Is a State-by-State Law, Not a National One
Nevada’s 21-day window, 10 percent retention cap, and notice requirements are specific to the state of Nevada. Every state has its own prompt payment law. The deadlines, caps, and notice rules are not the same from state to state.
An owner in another state reading this should not assume the Nevada numbers apply to them.
The right move is to search for the prompt payment law in the state where the project is located. Call that state’s contractor licensing board and ask directly. The process; a payment deadline, a lawful withholding requirement, a written notice condition shows up almost everywhere. The specific numbers are what change.
How to Protect Yourself If You Skipped the Contract
- Stop relying on verbal complaints. If something is wrong with the work, put it in writing the moment it is found. Not after a payment deadline has already passed.
- Know your state’s deadline. Look up the prompt payment law for your project’s state before a dispute happens, not during one.
- Send a real written notice before withholding anything. Amount, reason, reference to the agreement or code, signature. All four, every time.
- Document corrections and objections in writing. If the contractor responds to your notice, your reply needs the same level of detail theirs did.
- Get a written contract on the next project. This entire process is far simpler with a scope of work and payment schedule already in place.
None of this replaces an attorney. If a dispute is already headed toward a lawsuit, or the dollar amount is significant, get one involved. This should be done before sending or responding to anything in writing.
The notice requirements above are not difficult to complete, but a poorly worded notice can do more damage than no notice at all.
The contract you skipped would have prevented most of this. Since it is too late for that lesson on this project, the written notice is the next best thing. The law is on your side, as long as you realize it and actually use it.
