The contractor was paid and walked away: what the owner can do

A homeowner signs a renovation contract, pays the contractor the whole price, and a few months later the contractor has done less than a third of the work, has stopped appearing on site and does not answer letters. Two questions follow: can the owner go to court, and what does the owner get back.

The short answer is that the owner has a claim for breach of contract, and can bring it in the District Court. What decides how much is recovered is rarely the law, which is settled. It is the evidence, and most of it has to be gathered before anyone thinks about a court.

Walking off the job is a refusal to perform

A contractor who stops work, leaves the site and will not say whether he is coming back has, in substance, refused to perform the contract. The Contract Law, Cap. 149, deals with exactly that. Section 39 provides that where a party refuses to perform, or disables himself from performing, his promise in its entirety, the party entitled to performance may put an end to the contract, unless that party has signified, by words or by conduct, acquiescence in its continuance.

Two practical points follow from the wording.

• The choice is the owner's. The section gives the owner a right to end the contract. It does not end automatically because the contractor has disappeared, and an owner who wants to bring in someone else to finish should make the decision and put it in writing.
• Waiting can be read as consent. The right is lost if the owner shows, by words or conduct, acceptance that the contract continues. Months of messages granting "one more week" can later be quoted as exactly that. An owner who is prepared to give a final chance should say so in writing, with a date, and say what happens if the date passes.

Read the contract before acting on section 39. Many building contracts set out their own termination procedure, typically a written notice and a period to remedy the default. Where the contract has one, it should be followed even when the contractor has gone silent, because a party that ends a contract without the right to do so has itself broken it and hands the other side a claim. The contract may also contain an arbitration clause, which changes where the dispute is decided. Our page on construction disputes explains why the sequence of notices matters more than the strength of the complaint.

What the owner can recover

The owner's claim is for compensation. Section 75 of Cap. 149 provides that a person who rightfully ends a contract is entitled to compensation for any damage sustained through its non-fulfilment. Section 73(1) measures that compensation: the loss which arose naturally in the usual course of things from the breach, or which the parties knew, when they made the contract, to be likely to result from it. Remote and indirect loss is excluded.

On the facts described above, the loss that arises naturally is not hard to identify. The owner has paid for a finished renovation and received a third of one. What it costs to get from where the contractor stopped to what the contract promised, including the cost of putting right anything that was done badly, is the core of the claim. Where the whole price was paid in advance, very little of that cost is offset by money the owner still owes. The Supreme Court put the principle plainly in Saab and Another v. Holy Monastery Ay. Neophytos (1982) 1 C.L.R. 499: section 73 reproduces the common law rules on damages, and damages aim to restore the party to the position it would be in but for the breach. How the loss is measured in a particular case depends on the facts and on the evidence, and a claim put on the wrong basis can fail even where the owner's complaint is plainly justified.

The law gives the owner the claim. The evidence decides what it is worth.

Section 73(3) adds that, in estimating the loss, the means which existed of remedying the inconvenience caused by the non-performance must be taken into account. An owner is not expected to leave a half-finished house untouched for years while the case is heard. Having the work completed by someone else is consistent with that duty, provided the state of the property is properly recorded first.

Paying twice is the loss, and it has to be proved

The Supreme Court's judgment in Pavlos Pourgouridis v. Eteria Anaptyxis Gis Periklis Konstantinou Ltd (2009) 1 A.A.D. 784, Civil Appeal 358/2006, decided on 2 July 2009, is the one an owner in this position should read first, because the owner in it won on liability and still recovered almost nothing.

Under a written agreement made in 2002, the contractors undertook to build a holiday house in Moniatis for 31,200 Cyprus pounds, to be finished by 21 April 2003. The agreement allowed the owner, after a warning, to give the work to another contractor and charge the contractors with the resulting costs. The works fell behind, an extension was agreed, and they fell behind again. On 21 July 2003 the owner's lawyers ended the agreement and told the contractors that another contractor would finish the house. Once it was finished, he sued. The Limassol District Court held that the contractors were in breach and that the termination was lawful, and then awarded him 150 pounds in nominal damages.

The Supreme Court dismissed his appeal. It agreed that section 73(1) was the right starting point: the question was whether the owner, as the innocent party, should be compensated for the cost of the work not done, so as to be put in the position he would have been in without the breach. The loss, however, was not proved. There was evidence that the contractors had received 26,000 pounds, but none that any of it had been paid for the work they never did, and the sum included payments for additional works. What the owner had to show was that he had paid the contractors for that work, that they had left the building without doing it, and that he had therefore had to pay the second contractors for it again. He also could not connect what the second contractors were paid to the unfinished works listed in the architect's certificate, which costed them at 4,800 pounds against the 10,968 pounds claimed. The court described as wholly unreasonable the idea that lawful termination alone entitled him to the cost of the unfinished work, whether or not he had paid for it.

For an owner who has paid the whole price, that reasoning is the strength of the claim: every euro spent on finishing the work is money paid a second time. It is also the warning. The claim needs proof of each payment to the first contractor, a record of what each payment was for, an independent valuation of what was actually done, and a clear link between what the next contractor is paid and the work the first one left undone.

The owner does not have to pay for the repairs first

A judgment of the Court of Appeal, Georgia Kyperounta v. P.S.T. Contractors & Developers Limited, Civil Appeal 88/2019, decided on 4 June 2025, shows both how such a claim is proved and how it can go wrong at first instance.

The owner had bought a house in Geri, in the Nicosia district, under a written agreement of 6 March 2004 with the company that built it, and moved in during 2006. Serious damp appeared in much of the internal and external walls, the ground floor drainage ran into the neighbouring property's septic pit, and the ground floor doors deteriorated. She had the house inspected by an engineer appointed through the Cyprus Scientific and Technical Chamber, and obtained an offer from a contracting company to carry out the repairs. She sued in 2011.

The Nicosia District Court accepted her witnesses, found that the defects existed and were the builder's responsibility, and accepted the contractor's evidence that the repairs in his offer cost 23,340 euro. It then dismissed the claim, because she had not strictly proved what she had actually paid for the repairs, and it refused the 2,150.50 euro she claimed for the expert's report because the documents were credit invoices rather than receipts.

The Court of Appeal allowed her appeal on both points. It restated the rule that special damages must be pleaded and strictly proved, quoting the warning that a claimant cannot simply write down the particulars and "throw them at the head of the court". But she had not claimed what she paid. She had claimed the cost of reinstatement, and she had proved it through expert evidence the trial court itself accepted. The court entered judgment for 21,740 euro plus VAT, which was the 23,340 euro less the 1,600 euro cost of a pumping station the trial court had found was not the builder's responsibility, and for the 2,150.50 euro for the expert, with interest from the date the action was filed and 2,500 euro plus VAT in costs of the appeal. On the expert's fee, the court held that where the expert's attendance at court was necessary, the admitted fact that she had been charged that sum was sufficient evidence.

That was a defects case, not an abandoned job, and it sits alongside Pourgouridis rather than against it. In both, what has to be proved is the loss. Where the loss is having paid for work that was never done, the owner proves the payment. Where the loss is the cost of putting right work done badly, a reliable, itemised costing from a witness the court accepts can prove it before the repairs are paid for.

The steps, in order

1. Collect the paper. The contract and any specification or drawings, every proof of payment and what each payment was for (bank transfers are better than cash receipts), the messages and letters exchanged, and the contractor's full name or, if it is a company, its registered name and number.
2. Record the site before anyone touches it. Dated photographs and video, and an inspection by an independent civil engineer or quantity surveyor who records what was done, what was not, what was done badly, and what it will cost to complete and correct. This is the evidence the claim is built on, and it disappears the day another contractor starts work.
3. Put the position in writing. A letter that identifies the contract, states that the works have been abandoned, either ends the contract or gives a last dated opportunity to resume, and sets out the sum claimed. A letter before action of this kind is also the sort of step the procedure rules expect before proceedings.
4. Take the pre-action steps. Under the Civil Procedure Rules 2023, conduct before proceedings are issued is taken into account when costs are awarded, including against a party who ultimately wins.
5. Issue in the right court. Under section 21(1) of the Courts of Justice Law 14/1960, a District Court may hear an action where the cause of action arose, wholly or in part, within its district, or where the defendant lives or carries on business there. For a renovation of a house in Limassol, that is normally the Limassol District Court.
6. Think about enforcement from the start. A judgment against a contractor with no assets recovers nothing. Whether the contractor trades through a company, and what that company or person owns, is worth knowing before the claim is issued. Our page on enforcing a judgment sets out what follows a judgment.

What this means in practice

Time is on the owner's side in law and against the owner in fact. A claim for breach of contract is subject to a six year limitation period under section 7(1) of the Limitation of Actions Law 66(I)/2012. That is generous. The evidence is not: a half-finished renovation is often completed by someone else within months, and once that happens the state in which the first contractor left it can only be proved by what was recorded before.

The claim is built on an expert, not on the price. The figure the court needs is what it will cost to finish and correct the work, established by an independent engineer or quantity surveyor who can be cross-examined. The price paid and the fraction completed tell the story. The expert's costing proves the loss. Keep the expert's invoice: Kyperounta shows it can be recovered.

Prove the first payment as carefully as the second. In Pourgouridis an owner who had lawfully ended the contract recovered 150 pounds, because he could not show that what he had paid the first contractors covered the work they left undone. Keep the payment schedule, the receipts, and anything that ties each payment to a stage of the work.

Decide, then write. Section 39 lets the owner end a contract the contractor has abandoned, but not where the owner has shown, by words or conduct, acceptance that it continues. A final deadline in writing, followed by a clear written decision, avoids the argument that months of patience amounted to consent. Where the contract has its own termination procedure, follow it.

For owners about to sign, most of this is avoided by the contract itself: payment in stages against work actually done and certified, retention of part of each payment, a completion date, and a termination clause that says what happens when the contractor stops. Our note on ten clauses to check before signing a building contract covers them.

Questions we are asked

Sources

• Pavlos Pourgouridis v. Eteria Anaptyxis Gis Periklis Konstantinou Ltd (2009) 1 A.A.D. 784, Civil Appeal 358/2006, Supreme Court of Cyprus, 2 July 2009
• Saab and Another v. Holy Monastery Ay. Neophytos (1982) 1 C.L.R. 499, Supreme Court of Cyprus, 19 October 1982
• Georgia Kyperounta v. P.S.T. Contractors & Developers Limited, Civil Appeal 88/2019, Court of Appeal of Cyprus, 4 June 2025
• Contract Law, Cap. 149, consolidated text, sections 39, 73 and 75, CyLaw
• Courts of Justice Law of 1960, 14/1960, consolidated text, section 21, CyLaw
• Limitation of Actions Law of 2012, 66(I)/2012, CyLaw

This article is provided for general information purposes only and does not constitute legal advice.

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