What to Do When a Client Stops Paying for Completed Work
- Delta Law
- Apr 11
- 3 min read
Updated: Oct 11
You have scoped the project, written the code, and delivered the final product. Then your client stops responding. No payment. No feedback. No communication.
This situation is all too common for IT consultants, freelance developers, and tech service providers in Ontario. Whether you build custom software, manage cloud migrations, or provide ongoing maintenance, being ignored after completing your work can quickly disrupt cash flow and strain your business.
Are Verbal or Email Agreements Legally Enforceable in Ontario?
Yes. Under Ontario law, a contract does not need to be in writing to be enforceable.
A legally binding agreement generally requires four elements:
An offer, such as a written quote or project proposal.
Acceptance, such as an email confirming approval.
Consideration, meaning payment in exchange for services.
Mutual intent to create a legal relationship.
If you and your client agreed on the scope of work, timing, and cost—even through email—that can be enough to create an enforceable contract.
However, informal agreements can be harder to prove. Disputes often arise over what was included in the deliverables, when payment was due, and whether any penalties apply for late payment. Without a formal contract, your ability to recover unpaid fees may depend on the clarity of your communications and records.
What To Do If a Client Is Not Paying
If you have sent the invoice and still have not been paid, there are several steps you can take.
1. Send a Written Reminder
Begin with a polite but direct email. Attach a copy of the invoice, summarize the work completed, and include a firm payment deadline, such as within five business days. In many cases, a gentle reminder resolves the issue without further action.
2. Escalate with a Formal Demand Letter
If there is no response, the next step is to send a formal demand letter. This letter outlines the work completed, the amount owed, and your intention to take further action if payment is not received. A demand letter issued by a contract lawyer in Ontario often leads to quick results because clients take legal communication more seriously than informal reminders.
3. Consider Filing a Claim
If the client still does not respond, you may file a claim in Ontario Small Claims Court for amounts up to $35,000. This process is designed to be efficient and accessible for small businesses and consultants. You can represent yourself, but many people choose to consult a freelance contract lawyer to ensure their evidence, timelines, and documentation are properly prepared.
If the amount owed exceeds $35,000, the matter may need to proceed in a higher court, where legal representation is strongly recommended.
How to Protect Yourself in the Future
The best way to prevent payment disputes is by having a well-drafted contract that clearly sets out your rights and obligations. Working with a business lawyer for consultants can help you develop a professional agreement that protects your income and intellectual property.
Your client agreement should include:
Clear Payment Terms
State exactly when payment is due, such as 50 percent upfront and 50 percent upon delivery. Avoid open-ended language like “upon project completion” unless completion is clearly defined.
Milestone Billing
For larger projects, break payments into stages tied to deliverables. This helps maintain cash flow and reduces exposure if a client stops responding midway.
Ownership and Delivery Clauses
Specify that you retain ownership of the intellectual property, such as source code, until payment is made in full. You may also reserve the right to withhold delivery of final files if payment is outstanding.
Late Payment Interest
Ontario law allows businesses to include an interest clause on overdue amounts, such as two percent per month. This serves as both a deterrent and a means to recover lost time and administrative costs.
Termination Clause
Include a clause allowing you to stop work or terminate the agreement if payment is overdue by a specified number of days, such as 14. This ensures you are not continuing work for a client who has failed to pay.
When to Involve a Lawyer
If reminders and follow-ups fail, speaking with a contract lawyer or IT lawyer in Ontario can help you enforce your rights efficiently. A lawyer can:
Draft or review your standard client agreement.
Send formal demand letters on your behalf.
Advise you on collecting unpaid invoices.
Represent you in Small Claims Court if necessary.
At Delta Law, we work with consultants, technology firms, and creative professionals across Ontario to draft strong service agreements, recover unpaid fees, and minimize future risk.
Getting paid should never be the hardest part of your job. Clear contracts and consistent follow-up make a significant difference when clients delay or ignore payments. Even a short consultation with a contract lawyer in Ontario can help you protect your time, your work, and your business.
Book a Consultation to discuss your situation with an experienced lawyer for consultants and IT professionals.
