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If the individual or company does not finish the work but has already received payment, it is possible to use this action as a violation of the contract. Taking legal action against a home contractor on the basis of an oral agreement.Is new home building included in the law? Never sign over the insurance check; do not pay with cash, or pay the total charges before the work is complete. The contractor should not have to wait to be paid for payment for work completed. Also there are situations where the owner needs to pay in advance.