LEGAL GUIDE · LOCAL BUSINESSES AND COMMERCIAL DISPUTES
Construction contract retention money and unpaid bills
Retention money and unpaid construction bills require a contract-based account of completed work, certification, defects, measurements and release conditions. Completion, final bill and expiry of a defect-liability period may be different milestones. A contractor's own invoice may not satisfy every contractual condition.
What to examine
Match each claimed amount to the relevant clause, measurement book, certificate, variation approval and payment. Distinguish retention, security deposit, damages and ordinary unpaid work. Government contracts may have designated decision, notice or dispute-resolution steps that affect the route. Keep a limitation assessment alongside negotiations and departmental correspondence.
Records to collect
- Contract and conditions
- measurement and certification records
- running and final bills
- completion, defects and payment correspondence
Keep complete, dated copies and preserve originals. Note which records are missing and where they may be requested; do not alter a document to fill a gap in the history.
The applicable framework
Business records should identify the legal entity, agreed terms, performance and exact amount or decision disputed. Commercial-court procedure, arbitration and sector-specific mechanisms can impose different preliminary steps and remedies. A contract label or a business address alone does not determine the competent forum or establish personal liability.
A practical next step
Prepare a claim schedule linking each amount to proof and its due event. Assess the contractual dispute process and forum before sending an undifferentiated total demand.
Related guidance
- Unpaid business invoices — choosing a recovery route
- An arbitration clause in a business contract
- Recovering unpaid maintenance arrears
- Local businesses and commercial disputes — practice information
- Browse this guide collection
Sources and official resources
- India Code — The Arbitration and Conciliation Act, 1996
- India Code — The Indian Contract Act, 1872
- India Code — The Commercial Courts Act, 2015
Prepared 19 October 2026. General legal information. The applicable law, amendments, forum, evidence and time limits require assessment for the individual matter.