Non-Payment of Invoices in Construction: How to Build an Enforceable Contract and a Recovery Strategy

In construction, the problem is rarely just that an invoice goes unpaid. When payment is delayed, the entire contractual chain begins to give way: cash flow dries up, suppliers demand payment, the site slows down - and the contractor or subcontractor ends up financing someone else's project out of their own pocket.

The short answer to non-payment: effective recovery of receivables in construction starts with a well-drafted contract, not with the lawsuit. A properly written execution or subcontracting contract must unambiguously establish the deadlines, the handover procedure, the payment documents, the penalties, the right to suspend works, the termination mechanisms, and the procedural path for recovery. Only then does litigation become an effective lever - not a gamble. This guide covers both halves: the contract that prevents blockages, and the five-stage recovery strategy when they happen anyway.

The contract that reduces non-payment risk from the negotiation stage

Law No. 72/2013 · GEO No. 13/2011 · EU late-payment rules

Late payment between professionals is regulated - not just "a business problem"

As a rule, the payment term between professionals may not exceed 60 calendar days, subject to certain nuances and contractual conditions. In B2B transactions, interest accrues automatically from the day following the due date; absent an agreed rate, the statutory rate applies - the domestic interest regime sits in GEO No. 13/2011, and the applicable rate must be checked per period when a claim spans multiple intervals. The creditor may also claim the fixed €40 minimum compensation per late-paid invoice, plus reasonable additional recovery costs above that threshold.

The practical point: the late-payment regime exists to stop debtors from forcing creditors into involuntary financing. But citing the law is not enough - the contract must be designed so the claim is easy to document and prove.

Based on practice, the decisive clauses are:

1. An exact definition of the works and their stages
   What is executed, when, and against which technical documentation.
2. Invoicing correlated with work statements and minutes
   The invoice's trigger documents, defined contractually.
3. A confirmation/contestation procedure for work statements, with short deadlines
   Late, generic objections are the classic artificial defense - the contract should close that door.
4. Clear due dates - not "upon the beneficiary's disbursement"
   Vague formulas convert your claim into someone else's financing schedule.
5. The right to suspend works for non-payment
   With a threshold, a notice mechanism, and evidence rules - details below.
6. Penalty interest and recovery costs
   Anchored to Law 72/2013 and GEO 13/2011, with a precise calculation rule.
7. A forfeiture (termination) clause, where appropriate
   Identifying the essential obligations whose breach triggers it.
8. Jurisdiction and procedure rules - including for the payment order
   The procedural path decided at signing, not at the first unpaid invoice.

What "enforceable contract" actually means

Not necessarily a contract that is itself an enforceable title - but one that makes the claim easy to prove and quick to enforce. A claim that is certain, liquid, and due is a clearly determined debt, valued in money, past its maturity date - exactly the profile the accelerated payment-order procedure is designed for. In construction disputes, the difference between a good clause and a generic one can amount to months, or years.

Interactive: the forfeiture-clause activation checklist

A well-drafted forfeiture clause can allow termination without unnecessary procedural steps when the debtor fails essential obligations - non-payment at the due date, exceeding a grace period, unjustified refusal to confirm work statements. Drafted superficially, it produces the opposite effect: additional litigation over the validity of the termination itself. Before activating, verify each step:

Seven verifications before pulling the termination lever

• The clause precisely identifies the essential obligation breached (e.g., non-payment of an installment, refusal to sign handover documents)
• The non-performance is serious enough and falls within the contractual scenario - not every minor delay justifies termination
• The contract's notification mechanism is followed: breached obligation, amounts/documents, expired deadline, remedy activated
• Any contractual or legal grace period has been granted - and you can prove it
• The evidence package is correlated chronologically: contract, amendments, work statements, minutes, invoices, proof of transmission, correspondence
• Termination is aligned with the suspension of works and handover of the site - reducing the "abandonment" narrative
• The activation notice precisely tracks the contractual clause and the facts you can prove - drafted to survive a validity challenge

Suspension of works: often more effective than an aggressive demand letter sent too late

A correctly drafted suspension clause pre-empts the accusation that the contractor abandoned the site - suspension becomes a legitimate contractual remedy for non-payment. Without it, the contractor sits in a gray area: either keep working unpaid, or stop and become the target of claims itself. Have your suspension and termination clauses reviewed before you need them.

The recovery strategy: five stages, from day one of the delay to enforcement

An invoice for 40,000 lei, a series of work statements worth 600,000 lei, and a disputed project balance each call for a different strategy - but the sequence is constant:

From unpaid invoice to cash collected - the five-stage pipeline

Quick test: which procedure fits?

Four recurring situations. Pick the path you'd choose:

Situation 1: Work statements signed, invoices transmitted with proof, no technical objections raised - the beneficiary simply doesn't pay.

Payment order. Certain, liquid, due, clean documentation - the accelerated procedure's exact profile. Its strength isn't just speed: it compels the debtor to formulate concrete defenses early. Main risk to anticipate: artificial technical disputes raised late - which is why the contract's short contestation deadlines matter.

Situation 2: The beneficiary contests quantities and invokes quality objections on part of the works, with some technical substance to sort out.

Common-law action. Where serious technical or quantity disputes exist, the payment order is vulnerable - the common-law route allows full evidence-gathering, including expert reports. The trade-off is duration; the mitigation is a well-organized evidentiary file from day one.

Situation 3: The debtor shows signs of financial distress - payments stopped toward several suppliers, enforcement proceedings started by other creditors.

Precautionary measures + insolvency analysis - fast. This scenario increases the chances of effective recovery but requires a very rapid response: assess pursuable assets, the risk of asset transfers, and the proximity of insolvency. A favorable ruling obtained after the debtor's collapse has limited practical value.

Situation 4: The contract is ongoing, with repeated arrears - you need payment discipline restored without necessarily killing the project.

Notice + suspension + forfeiture clause. Immediate commercial pressure, keeping the relationship recoverable - but it requires solid clauses and careful legal execution: the notice tracks the contract precisely, the suspension follows the agreed threshold and mechanism, and every step is documented. This is the lever that must be negotiated in advance, not improvised at the first arrear.

Recurring dispute patterns - and how BSA structures the work

General contractor-beneficiary conflicts recur in recognizable forms: unpaid final installments or good-execution retentions after completion; interim certificates contested late without precise technical objections; refusal to sign handover minutes; suspension of works contested by the beneficiary; and recovery that must run in parallel with keeping the project alive and preserving evidence. In our experience, the three most valuable pieces of evidence remain constant: the well-drafted contract, proof of execution of the works, and proof that the payment documents were communicated.

Component 1 - contractual construction

Drafting and negotiating execution and subcontracting contracts; handover and work-statement confirmation clauses; invoicing and due-date mechanisms; interest, penalty, and recovery-cost clauses; forfeiture and suspension clauses; debt acknowledgments and restructuring agreements.

Component 2 - recovery and litigation

Legal notices and formal notices of default; payment orders; commercial litigation on construction contracts; evidence-preservation strategies; legally assisted negotiations; coordination of enforcement and, where applicable, insolvency-risk analysis.

"The best legal strategy is not always the longest process - it's the one that maximizes effective and fast recovery. Sometimes that's a guaranteed installment plan or a debt acknowledgment; sometimes firmness is the only viable option. The lawyer's job is to distinguish between the two, and not to mistake flexibility for a costly concession."

- The working principle behind BSA's construction recovery mandates

How BSA compares in the market - a balanced note

Clients often compare BSA with large full-service firms (Nestor Nestor Diculescu Kingston Petersen, Țuca Zbârcea & Asociații, Mușat & Asociații) or boutique practices such as BMA Legal - all serious options. BSA's positioning, based in Bucharest (Str. Belgrad 10, Sector 1) with a typical response within 24 hours, focuses on rapid intervention, direct engagement with the decision-maker, and correlating contract, litigation, and effective recovery. The relevant difference for a construction client isn't firm size - it's how quickly legal analysis converts into a strategy applicable on the ground and to cash flow. As with any self-positioning, verify it against documented deliverables for your case.

Frequently asked questions

Unpaid invoices, contested work statements, or a contract that needs renegotiating?

Act before the problem becomes a financial blockage. BSA assists contractors, subcontractors, developers, and suppliers with commercial construction contracts and receivables-recovery litigation - with a rapid assessment of your contract and your recovery options.

Contact us

Sources and references

Law No. 72/2013 on combating late payment in contracts between professionals: legislatie.just.ro · Government Emergency Ordinance No. 13/2011 on statutory remunerative and penalty interest: legislatie.just.ro · Civil Procedure Code - the payment order procedure: legislatie.just.ro · Your Europe - Late payment in business-to-business transactions (incl. the statutory rate for Romania, H2 2026): europa.eu/youreurope · Buju, Stanciu & Asociații (BSA): bsa.ro

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. The applicable rates, thresholds, and procedures depend on the period, the contract, and the evidence in each case; a dedicated legal analysis is required for a formal opinion. Information about the firms mentioned comes from public sources.