Back Charges

AaronJ

Hi everyone, I have a question about getting back charged from a Primary Contractor. I have been working with a company for about 5yrs everything has been good. Recently they changed their contract and had all of their contractors sign it.
Basically stating a few more items they can back charge us on. It hasn't been that bad in the last 5yrs not a big deal.
So this new item is if a customer calls within 90 days from when they had there installation done saying they have a problem with their installation.
Well what they did was go back 90 days from when the contract was signed and started applying these back charges.
We where a well known Installation Company that was set up throughout the US. Since this has happen, we had to close our doors.

They have back charged us over $200K within the last few months.

Regardless are they suppose to still notified or give us an opportunity to go back and fix faulty work if we had any?
A customer could call in for a bad battery in the remote or change their box to the wrong channel and we would get back charged for it.

Any info would be great, Thanks

RidgeWalker

It seems to me that if they are going to get a call about faulty work or something they should allow the contractor who performed the work the chance to rectify it before assesing a back charge.

If they are back charging you, are they providing a detailed description of what had to be done and the breakdown of the cost's? It seems to me one could take advange of you by saying such and such work cost 35k when it really only cost them 25k.

If your contract does not have this provision in it already I think it is a pretty one sided contract. You might want to have an attorney review your contract to see if it is legal.

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Bob Kovacs

You've been backcharged $200k?? How much volume do you do with this contractor????

jimmys

If your work you're being backcharged for was done under the old contract, you don't have to pay. Even under the new one, if you can take this to court, the GC would have to account for the accuracy of their charges, as Ridge said. It sounds like a crummy way to deal with your subs. In my small market area, that kind of behavior would mean you wouldn't find any subs to work with you.

Leo G

They need to give you the oppourtunity to repair your own work before they can back charge you for it. How can you possibly do warranty work if no one tells you it needs to be done? Here's a bill for the repairs that we didn't notify you about just doesn't cut it.

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AaronJ

Thanks everyone for your replys

We where installing about 4,000 customers a month for this company. So there was allot of volume being done.
Thats excatly how I felt was we were not given an opportunity to Guranutee our work. Since they have put all these back charges in place that have lost allot of there contractors and we are trying to get a civil law suit going.
I just wanted to see what everyone else thought

They are providing details when you get your check, Just has the customers info and deductions.

RidgeWalker

Seems to me some one is going to be loosing a law suit soon.

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DavidNTX

In Texas, at least in commercial construction, we have to be notified in writing before they can backcharge us for having anyone else do a part of our contract.

There are situations in which you might not be able to correct the work and the work had to be performed by others. In situations like adjacent work was damaged by your installation would mean the corrections had to be made by the corresponding contractor. If that battery provided a critical function that might even be reason for a legitimate backcharge.

How can they go back to a time before you were under contract for them for any reason?

Many/most times those large primary contractors will try and take you for every single dime they can. They have the most 1 sided contracts in all of industry in all of the free world and some of the smoothest talking salesman to not only sale a job to a customer but to take an unsuspecting subcontractor to the cleaners if they give him half a chance. When dealing with these guys you have to CYA but good with signed paperwork, photographs taken during the installation and after the job is complete.

Have all of your lien rights expired?

If not you should maybe check and see what is involved. Many/most times sending them an intent to file lien will straighten them out. They may even balk at first with threats of no more work etc. but if your lien rights haven't expired, this just may help you get your money. If they have expired you can bet they know the day that your rights did expire.

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Ed the Roofer

Did the contracts you were under at the time, have a "Time Is Of The Essence" clause?

Was your work done under the previous contract agreement or the newer one sided one?

If the old one and you did sign the newer one also, did the newer contract state that any previous agreements were subject to the new terms?

Just because it says something in a contract does not make it legally binding.

Each clause must provide for both parties in one way or another.

It sounds like the dollar amounts at stake are high, not only for you, but other contractors as well. A unified lawsuit might split the legal fees, but everyone needs to be determined and in agreement with which outcome they demand to wait for.

If you are now out of business, do you have any funds to pay for an expensive drawn out litigation?

I will look up cases about Back-Charges, because I never encountered any situation like yours before.

Ed

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