Questions & Answers
Claiming the advance payment back while the company is not responsible for the delay
We are a contracting company based in Dubai. We entered into a contract with our client two years ago, the client released the advance payment at the start. They have caused delays at the site due to which we weren't able to proceed with the work for this duration.
We were recently invoiced charges for the delay but they aren't ready and are now trying to terminate us from the contract. They are asking us to repay the advance payment made in 2018 April.
Our contracts do not carry any clauses for the security of advances or liquidated damages.
Can they still claim back the advance even though we were not the ones responsible for causing the delays?
What are the options we have to move forward with this situation?
Hello,
As per your question, we think that you are a subcontractor. Normally, if it is a sub-contract, then it will be back to back contract. However, if you are the main contractor, then the insurance will come into effect.
Further, usually in sub-contracts, most of the clauses of the main contract are visible. In case of payment, we have to look for the payment clause whether it is "pay if paid" or "pay when paid".
If it is "pay if paid", then the contractor cannot claim the advance money, since it is already paid to him. However, we have to see the process by which the termination takes place, and then accordingly, we take the decision.
You may contact us via phone or email.
With Regards,
