Demand Letters for Subcontractors and Vendors Who Vanish Mid-Project
There is a particular kind of headache that only business owners know.
You lined up a subcontractor or vendor, signed the agreement, wired the deposit, built your own delivery timeline around their milestone dates… and somewhere halfway through, they simply stop.
No replies to email.
No answers on WhatsApp or Slack.
Maybe one vague “I’ll get to it next week” and then nothing.
Meanwhile your own client is asking for updates, your operations are stuck, and you are staring at a half-finished job and an invoice you already paid.
This article is about that situation: subcontractors and vendors who effectively disappear mid-project. The focus is on how to use a demand letter as a serious, but still businesslike, step before you escalate into arbitration, collections, or a full lawsuit.
You will see the legal ideas in the background (breach, anticipatory repudiation, abandonment), how to get your facts straight, how to structure a non-lawyer demand letter that does not sound like it was written by an algorithm, and a free template you can adapt. There is also an FAQ at the end for common edge cases.
When does “going dark” become a breach, not just being slow?
Not every delay is a breach. Projects slip all the time for reasons that are annoying but legitimate: illness, supply chain delays, scope creep, changes you approved late in the day. A contractor who communicates, proposes revised dates, and keeps working is inconvenient, but not necessarily in breach.
The legal picture changes when a subcontractor or vendor simply stops performing without a valid excuse and gives you no realistic plan to continue. At that point you are in breach-of-contract territory: they have failed to do what they promised, when and how they promised.(Watkins Firm)
If they explicitly tell you they will not be finishing the project, or make it very clear through words or conduct that they are done, you may also be looking at anticipatory breach or anticipatory repudiation: a situation where one party signals that they will not fulfill their obligations before performance is due.(UpCounsel)
In construction and similar industries, “abandonment” is a specific flavor of this problem. A contractor is generally considered to have abandoned a project when they relinquish their rights and interest in the job with no intent to come back, as case law and commentary on construction abandonment explain.(JD Supra)
The pattern you are looking for is:
- Material work remaining;
- No credible progress;
- No valid contractual excuse;
- No meaningful communication or plan to cure.
Once those elements are present, you are well within your rights to call what is happening a breach and to start writing like it.
Start with your contract and your own performance
Before you draft anything with the word “demand” in it, pull out the paperwork.
Most modern vendor and subcontractor agreements spell out:
- Scope of work and milestones;
- Deadlines, delivery windows, or phases;
- Payment structure (deposit, progress payments, retainage, final payment);
- Termination rights;
- Notice-and-cure provisions (for example, “party must give written notice of breach and ten days to cure before terminating”);
- Dispute resolution (mediation, arbitration, courts, venue).(Business Attorney San Jose)
Three things matter immediately.
First, what exactly were they supposed to do by the time they went silent? Check the scope and any change orders. You want to be precise in the letter: “The parties agreed you would complete X by Y date.”
Second, what did the contract say about delay, default, and termination? Many agreements require you to give a written notice of breach and a limited opportunity to cure before you can treat the contract as terminated or go elsewhere.(Volpe Law LLC) Your demand letter will often double as that notice.
Third, are you fully current on your own obligations? If you have been withholding contractually-required payments without a valid reason, or you caused delays by failing to provide approvals or access, the other side may have legal arguments of their own. A contractor who halts work because the client is significantly behind on payments is sometimes within their rights.(Robinson & Henry, P.C.)
A demand letter is at its strongest when you can say: we did what we promised, you did not, and here is what needs to happen next.
Evidence you should have before you send a demand letter
Good demand letters feel inevitable because the facts are already lined up. Take a beat to gather them.
You want the written agreement or, if the relationship is informal, the emails and messages that show what was agreed: scope, price, schedule, and key responsibilities.
You want the communication trail: emails, messages, tickets, and calls where you asked for updates, flagged missed deadlines, or tried to solve issues. The dates of those attempts, and the lack of response, become part of your story.
You want a snapshot of project status: what has actually been delivered, what is partially done, and what has not been started. In technical or creative work, that might include code repositories, design files, drafts, or staging servers. In construction, it may mean site photos, inspector reports, or delivery receipts. Guides on handling vendor breaches and contractor abandonment all emphasise documenting the state of the project when the breach occurs.(Robinson & Henry, P.C.)
You want the money picture: deposit paid, progress payments made, change orders approved, and any outstanding invoices. Note the dates and amounts.
You also want to note what you are doing to mitigate. Contract law generally expects non-breaching parties to take reasonable steps to reduce their losses: lining up replacement vendors, preventing additional damage, and not sitting passively while costs snowball.(Watkins Firm) Your demand letter can quietly signal that you are already thinking this way.
Once those pieces are in place, the letter almost writes itself.
What a demand letter can actually accomplish in this situation
A demand letter is not a magic spell. But in subcontractor and vendor disputes, it usually serves several important purposes.
It formalises the breach. Instead of scattered, emotional messages, you have one structured document that says: here is the contract, here is what you did and did not do, here is why that is a breach, and here is what must happen by when.
It often satisfies notice requirements. If your agreement requires written notice and an opportunity to cure before you can terminate or sue, the letter can serve as that notice while also staking out your position.(Volpe Law LLC)
It creates leverage. Vendors who have been ignoring “just checking in” emails often sit up when they see a detailed demand that mentions breach, deadlines, and potential next steps. Demand-letter guides written for contractors themselves acknowledge the reverse: a clear demand letter is a standard pre-litigation step and often triggers real negotiation.(Levelset)
It sets you up for escalation. If the dispute later goes to arbitration, small claims, or full court, your letter becomes Exhibit A. Judges and arbitrators like seeing that you gave the other side a fair chance to fix the problem before filing.
And sometimes it works. A disappearing vendor who was hoping you would just go away may decide that finishing the job, handing over files, or issuing a partial refund is cheaper than fighting.
Tone: firm, factual, and still businesslike
It is tempting to unload. They left you hanging in front of your own client; you are burning time and money fixing their mess. But the more emotional the letter, the less useful it is.
Write as if you know it may be read by a neutral third party later. Clear, concrete facts carry more weight than adjectives. You are not trying to win an argument; you are setting up a record.
That means:
You describe what happened in dates and actions, not feelings.
You point to specific contract language or prior messages, not vague accusations of “unprofessionalism.”
You say exactly what you want (finish, hand off, refund, pay for your extra costs), not “make this right somehow.”
You give a real deadline and real next steps, not “ASAP” and “I guess I’ll have to take legal action.”
Demand-letter best-practice guides emphasize avoiding empty threats, purely emotional language, and vague demands because they kill your leverage rather than increase it.(Terms.law)
How to structure a demand letter to a vanished subcontractor or vendor
You do not need legalese. You do need a logical flow.
A practical structure looks like this.
You identify yourself, them, and the project. State who you are, who they are, and what project or purchase order you are talking about.
You summarise the agreement in plain language. Describe the scope they agreed to perform, key dates, and how payment was structured.
You tell the story of what has actually happened. State what they have done, what they have not done, when they stopped communicating, and any attempts you made to get the project back on track.
You connect that story to breach. Explain that their failure to perform and to respond is a material breach of the agreement and, if relevant, amounts to anticipatory repudiation because they have effectively indicated they will not complete their obligations.(UpCounsel)
You set out what you want them to do now. That might be to resume and complete the work by a specific date, to refund amounts you paid for undelivered work, to hand over partially completed materials so you can finish with someone else, or some combination.
You give a deadline and explain what you will do if they ignore it. That may include hiring a replacement and holding them responsible for extra costs, pursuing chargebacks, bringing a claim in small claims or under any dispute clause, or reporting them to relevant licensing bodies in regulated trades.(calalaw.com)
You reserve your rights. This keeps you from accidentally waiving claims while you try to resolve things.
With that in mind, here is a template you can adapt.
Template: demand letter to a subcontractor or vendor who vanished mid-project
Adjust the tone and details to your industry. This version assumes a B2B services or construction-style relationship.
[Your Name]
[Your Title]
[Company Name]
[City, State / Country]
[Email Address]
[Date]
[Vendor’s Name]
[Vendor’s Title, if known]
[Vendor Company Name]
[Vendor Address or City]
Subject: Non-Performance on [Project Name] and Demand for Action
Hello [First Name],
I am writing about your work for [Your Company Name] on the [brief project description] project under our agreement dated [agreement date] for [Project Name] or [Purchase Order / Work Order number].
Under that agreement, [Vendor Company Name] agreed to provide [short description of scope, for example “electrical rough-in and finish work at [job address],” “design and development of the new [Client] website,” or “delivery and installation of [equipment]”]. The work was to be performed between [start date] and [end date or milestones], with payments of [describe structure, for example “a deposit of [amount] paid on [date], progress payments against milestones, and a final payment on completion and handover”].
To date, you have completed the following portions of the work: [very short summary of what has actually been done]. However, the following work remains outstanding under our agreement: [very short summary of remaining work].
Since approximately [date], you have not performed any meaningful work on the project and have not provided a clear schedule to complete it. My emails and messages on [list a few key dates] requesting updates and proposing ways to get the project back on track have gone unanswered, or have been met only with general assurances and no follow-through.
As of today, the project is incomplete, our own obligations to our client are at risk, and we are incurring additional costs and delays as a result of your non-performance.
Your failure to complete the agreed work and your lack of response to repeated attempts to resolve the issue constitute a material breach of our agreement. To the extent you have indicated that you are unable or unwilling to complete the project, that also amounts to an anticipatory repudiation of your remaining obligations.
I would prefer to resolve this directly and avoid further escalation. To that end, I am requesting that you do the following:
First, by [specific date, for example seven calendar days from the date of this letter], confirm in writing whether you intend to complete the project and, if so, provide a concrete schedule for finishing all remaining work no later than [reasonable completion date].
Second, if you are not able or willing to complete the project, confirm that in writing by [same date] and:
– Provide a full accounting of the work actually performed to date;
– Deliver to us, by that same date, all partially completed materials, files, drawings, code, documentation, or other work product created for this project so that we can continue the work with another vendor; and
– Refund [amount] representing payments made for work and deliverables that you have not provided.
If I do not receive a substantive written response by [date], I will proceed on the basis that you do not intend to honor your obligations. In that event, [Your Company Name] will take steps to protect its interests, which may include hiring a replacement subcontractor or vendor to complete the project and seeking to recover from you the costs and damages attributable to your non-performance, as well as pursuing all other remedies available under our agreement and applicable law. Those remedies may include termination of the contract for cause and, where appropriate, formal proceedings to recover amounts due.
Nothing in this letter is intended as a waiver of any rights or remedies [Your Company Name] may have, all of which are expressly reserved.
Please treat this as a serious request to resolve the situation promptly. I look forward to your written response by [date].
Sincerely,
[Your Name]
[Title]
[Company Name]
You can adjust the demands to fit the situation. In some cases, your priority will be getting your deposit back; in others, getting your hands on partially complete work so you can finish with someone else is more valuable than a refund. The structure stays the same: what was agreed, what happened, why that is a breach, what you want them to do, and what happens if they do not.
Frequently asked questions about demand letters to vanished subcontractors and vendors
Is walking off the job always a breach of contract?
Not always. A contractor or vendor can sometimes suspend or stop work legally if the contract or law gives them a valid excuse. Common examples include serious nonpayment by the client, unsafe working conditions, or a “cardinal change” where the scope has been altered so drastically that it is no longer the same job they agreed to.(Robinson & Henry, P.C.)
That said, unilaterally disappearing without explanation, while keeping your money and work product, is rarely defensible. Your letter does not have to decide the entire legal question. It simply states your view: based on the contract and the facts, you see their non-performance as a material breach and are acting accordingly.
What if my own company is behind on payments?
If you are materially behind on payments that were clearly due, the vendor will argue that your nonpayment justified their stopping work. Many construction and vendor agreements explicitly allow work to halt if the client fails to pay on time.(Robinson & Henry, P.C.)
In that scenario, your demand letter should be more nuanced. It may need to acknowledge the payment issue and offer to cure it in exchange for resuming work under a clear schedule, or to negotiate a structured wind-down where you part ways with each side settling up. A pure “you breached” letter while you are holding their money can backfire.
Should I demand they come back and finish, or just ask for a refund?
It depends on timing, trust, and your downstream obligations. If the relationship is salvageable and the vendor has unique knowledge or access, getting them to finish quickly might be best. If trust is gone, or deadlines with your own client are blown, forcing a return to the project may just add risk.
You can structure the letter to offer both paths: either a firm commitment to complete by a specific date or a refund plus handover of materials. Leaving that choice to them can be tactically useful; it also shows any later decision-maker that you were being pragmatic.
Can I hire someone else while I wait for them to respond?
You generally have a duty to mitigate your damages, which means taking reasonable steps to limit your losses once you know the other side is not performing.(Watkins Firm) That can include lining up a backup vendor, especially if your own client or operations are at risk.
The practical balance is timing. If you hire a replacement before giving any notice or opportunity to cure, you may give the original vendor arguments that you did not follow the contract’s process. If you wait forever, your damages and stress grow. A tight demand letter with a short deadline, sent when it is already obvious they are not performing, helps justify bringing in someone else once that deadline passes.
How much time should I give them to respond?
There is no universal rule, but ten to fourteen calendar days is common for non-emergency disputes. If your contract has a specific “cure period” for breaches, use that.(Volpe Law LLC) If you are staring at an imminent, fixed deadline with your own client, a shorter window can be justified, as long as you can explain why waiting longer would cause disproportionate harm.
Do I have to prove my exact damages in the demand letter?
No. A demand letter does not have to read like a damages expert report. It should, however, make clear that their non-performance has caused, and will continue to cause, real costs: lost time, replacement vendor expense, idle staff, penalties under your own contracts, and so on.
If you already have concrete numbers, you can mention them. If not, you can reserve the right to seek damages, including the difference between what you agreed to pay them and what you end up having to pay a replacement to complete the work, together with reasonably foreseeable losses caused by their breach.
Does sending a demand letter destroy any chance of working together again?
Sometimes the relationship is already over; the letter just acknowledges that reality. In other cases, a clear, factual letter can actually improve things by forcing a real conversation instead of passive-aggressive silence.
How you write matters. A letter that says “here is what has gone wrong, here is what we need to fix it, here is a reasonable path forward” leaves more room for reconciliation than one full of insults and threats. Some vendors respond positively when they see you are treating the situation like a business dispute rather than a personal attack.
Can I threaten to report a licensed contractor or vendor to regulators in the letter?
If your subcontractor is in a licensed trade (for example, a general contractor or specialized construction trade) and their conduct clearly violates rules on abandonment or non-performance, reporting them to the licensing board is sometimes appropriate. Many state boards treat unexplained abandonment of projects as a disciplinary issue.(calalaw.com)
Whether you mention that in the first demand letter is a strategic question. In many cases, it is better to focus initially on finishing or unwinding the project; you can always bring regulators into the picture later if they refuse to engage.
What if the subcontractor or vendor is in another state or country?
Cross-border disputes are more complex, but the logic of the letter is the same. You still had a contract; they still failed to perform; you still need the record. The main differences are practical: where any arbitration or lawsuit would have to be filed, which law governs, and how realistic enforcement would be if you win. Your agreement’s choice-of-law and venue clauses, if any, matter more in that context.(Watkins Firm)
Even when suing would be impractical, a well-documented demand letter and follow-up can help with chargebacks, platform complaints, or internal vendor-risk decisions.
Is a demand letter required before I can sue or arbitrate?
In many business contracts, yes. It is common to see clauses that require a written notice of breach and a period to cure, and sometimes a period of informal negotiation or mediation, before either side can start formal proceedings.(Legal GPS)
Even when not strictly required, sending a demand letter is usually a good idea. It shows that you acted reasonably, may flush out useful admissions or documents, and gives you one last chance to fix things without spending real money on a full dispute.
What if they respond with excuses but still do nothing?
Treat that as data, not resolution. If their response does not include a specific schedule, concrete steps, or a believable plan, you can send a short follow-up confirming that you appreciate the explanation but that, in the absence of actual performance by a certain date, you will proceed with your planned next steps.
In other words, do not let vague replies reset the clock indefinitely. Tie everything back to dates and obligations. That way, if you later have to explain why you moved on, you can point to a chain of clear, dated communications that went nowhere.
Subcontractors and vendors disappearing mid-project is not just annoying; it is a textbook breach of contract once you strip away the fog. A well-drafted demand letter is how you cut through that fog. It tells the story once, cleanly, puts the responsibility where it belongs, and either brings the other side back into the deal or clears your path to replace them and recover your losses.