Legal Dispute: Randy vs Sarah

Explanation

Good-faith dispute: In legal terms, a "Good-faith dispute" clause is included in contracts involving the provision of services or sale of goods. It allows the party receiving the service or goods to withhold payment if there is an issue or dispute regarding the quality or completion of the delivered product or service.

In the given scenario, Sarah discovered an issue with the bathroom remodel done by Randy and requested him to fix it before the payment was due. However, Randy refused to address the issue. Sarah proceeded to pay $19,000 instead of the full $20,000 on the due date. Randy cashed the check and attempted to collect the remaining balance.

At trial, the presence of a good-faith dispute and Randy cashing the check despite the unresolved issue with the bathroom would likely lead to Randy losing the case. By accepting the partial payment, Randy implicitly acknowledged that there was a legitimate concern regarding the quality of the work performed. Therefore, Sarah withholding a portion of the payment due to the unresolved dispute is justifiable under the good-faith dispute clause.