Can I demand a contract payment for work that has been created if the final payment for the work is due based on client approval

Question

I'm just going to start off by saying I don't need a recommendation on writing a better contract. I am fully aware of my contract's strengths and weaknesses.

However, I would like to know if I can demand payment from a toxic client if the entire project is done and they are asking for too many changes with terrible communication throughout the project.

The contract states " If, at any stage, you’re not happy with the direction our work is taking, you’ll pay us in full for everything we’ve produced until that point and cancel this contract."

Now we believe they will try to cancel the contract even if we implement the vast array of changes they demanded that were not provided in a timely manor.

The contract payment schedule states we will receive the final payment of 55% (the remaining balance has been paid, although our work hours have far outweighed their payment.) of total cost or the remaining payment upon the completion of the project. 

Knowing this, would I be able to force them to pay for what we have developed (The entire project with the exception of the final changes they are asking is complete. One such change is one of the main assets that "doesn't look good" to them) under threat of legal action? Obviously I do not want to threaten legal action. But is there a route to get them to pay for our work even if they don't like one aspect of it and have said they will not pay unless it is 100% to their standards?

Also, is using the term "in a reasonable amount of time" in a contract able to be interpreted by us?

Once again I do not need a lecture on how bad my contract is, but would like to learn for improvements next time and if I can get the money my small business is owed.

Answer 1

You cannot simply terminate the contract merely because the other party does something that you don't agree with, unless it is a breach of the contract or you are granted that right by the contract. If you purport to terminate the contract, it is likely that you will be found to have repudiated it, and the other party will be able to terminate and commence proceedings against you.

If you have granted them the ability to terminate the contract and pay in full for work produced, then that is what they are required to pay in order to terminate the contract.

If the amount is not stipulated in the contract, a court will determine the amount to be paid on a quantum meruit basis - the amount you are owed, generally with reference to market value.

However, this may or may not take into account the actual time, unless time was a means by which the parties could have contemplated being a measure of work done.

A term containing in a reasonable amount of time will be interpreted by courts to hold its ordinary meaning, with reference to what an objective, informed observer would understand, unless it has some special meaning that could be implied. Your personal interpretation is irrelevant.