- Category: contract law, Contracts
Retention in Contracts for Work – When It Makes Sense and What Risks It Brings
The work is done. The contractor fulfilled all obligations. But instead of getting paid, the client says:
“We’re keeping part of the payment just in case something goes wrong.”
Retention.
For some, it’s a quality guarantee. For others, it’s a dangerous loophole that allows delayed or denied payment.
Let’s explore when retention is a useful tool, and when it can become a serious legal risk.
What is retention?
Retention is part of the price withheld by the client after completion of the work. It serves as a financial guarantee for defects that may show later or for obligations like defect removal.
In practice, it’s usually 5–10% of the contract price, released after a fixed period or once defects are remedied.
Is retention legal?
Czech law doesn’t specifically regulate retention, but it can be contractually agreed.
⚠️ If retention is:
vague,
excessive,
unilateral,
or without clear release terms,
…it may be unenforceable, contrary to good morals, or even abusive.
When does it make sense?
Large-scale or technical works, where defects often appear later.
When the contractor doesn’t offer clear guarantees or support.
Risks of retention:
Legal uncertainty if not properly worded.
Client may delay or refuse payment unfairly.
Contractor is financially exposed for months after delivery.
Best practices:
Set fixed percentage and amount.
Clearly define release conditions.
Make sure it’s not a penalty – just postponed payment.
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- Publikováno:
- Naposledy aktualizováno: 17/06/2025