Backing Out Of Contract

CNCconstruction

OK so in Michigan there are certain times when the customer can back out of a contract up to 3 days after signing (cool-off period).

So can we as contractors back out of a contract up to a certain amount of time? I have never tried or wanted to till now.

I recently gave a refund to a customer of mine that was wasting my time and calling 10 times a day about stuff already discussed. it was within 3 days of signing and I sent full refund with letter explaining why and certified mail, as well as telling her before hand.

She is still calling me, like a stalker!

So as a licensed builder was that right for me to do?

Warren

What did the letter say that u sent. Seems like we are not getting enough information to make a proper suggestion.

naptown CR

this is perfectly legal and most contractors around here reserve a 10 day right to cancel to allow them enough time to review the contract and verify all items. This is particularly done when someone other than the owner is doing sales. I didn't read your location but this can be incorporated into your contract.

Darwin

If your company and the client weren't a good fit then thats that...I guess...

Although she still wants some form of added communication with your company, did she agree to part ways with you?

pcplumber

Customers get several estimates and base their decision to go forward with a job based on the price you give. Suppose a customer signs a contract with 10 contractors to build a house, gets a loan based on the estimates, and 5 contractors sign a contract and back out. This would be devastating to the customer. I would assume the customer could hire another contractor and sue you for any difference in contract amounts.

In most cases, you can back out of a contract by being polite and giving the customer a legitimate reason. You are more likely to get sued by a general contractor, or government agency for backing out.

Backing out, or not completing a contract is the reason California law requires a performance bond, (insurance). If you back out your insurance company will pay to finish the job and sue you. Then, you can lose your contractor's license.

We have a clause in our contract that states we can back out of an estimate, or bid, and the contract is not binding until it is signed by the Buyer and the Seller. I don't think you can put a clause in your contract that gives you the right to back out after the contract is signed, for any reason.

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CNCconstruction

The letter stated that I was unable to give them the job attention that they required, that I have other customers to work with and can't spend everyday on the phone with them explaining everything again. I Apologized to them for canceling. and gave them a check for full refund and asked them to please find another contractor.

I don't have the letter here with me. I was not rude or insulting.

On top of that they started changing when they needed the deck built by. There was a short dead line (not on contract). I also told them it would depend on how soon I could get permit. The owner said he will get it the next day and to just get the app and fill it out for him (not sure if he knew the inspector or what, but I new i shouldn't but i agreed to get it done in time). Then wasted a week telling me it was this city, then that city, then I check myself cause I was fed up with driving to all these places and found out it was another city (area I have not worked in and new to advertising in that area).

Long story short it was a huge mess and he told me to get the permit myself after wasting a week and told me it had to be done by the 10th of June. a 750 sq ft deck! I couldn't even get the permit by the time he demanded

CNCconstruction

OK I need to have that added to my contracts then!

naptown CR

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If it is a salesman that signes the contract it can be contingent on management approval. this is no different than any other contingency. A contract is a contract if there is a kick out clause it will be enforceable n court but only if in the contract. The owner signed it giving his assent to the clause. If the owner is the salesman than a review period would be appropriate.

CNCconstruction

It doesn't seam that way as she keeps calling, I can't explain it again or any other way to her

Darwin

That response made even me dizzy...

Darwin

Then don't take the call. See her number--send it to voicemail

CNCconstruction

That is what I have been doing for the last couple days. They send emails voice mails, they don't sound mean or nasty or mad, just please call me.

Just didn't no if what I did by backing out could get me into some sh** either with licensing or lawsuit

pcplumber

I can't imagine a customer suing for backing out of a contract unless you did some kind of damage to the property or monetary damage. Be as polite and apologetic as possible. It is always better to nip things in the bud and you can get an edge by calling the customer rather than having her call you. Call her two or three times and apologize.

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Darwin

Call you for what? To get Pistons tickets? To get an oil change? To buy a lamp? WTF?

pcplumber

I thought about putting a 'contingency' clause in my contracts. The clause would make it appear that salesmen are not credible nor worthy of making intelligent and independent decisions.

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Mitch M

I agree that the contract is not valid until signed by all parties. A proposal is one thing. It needs to be signed and sent to the client. It needs to say that it is not binding until the contract is signed. Once you make up the contract, do not sign it. Send it to the client. That way if they cross something out or try to modify it or if something happens that you cannot do the contract, that will give you one way out. Just make sure you have all of your other ducks in a row. This was something suggested by my attorney.

Mitch M

I realize that the last post that I did may not have answered your question since it is after the fact. I still think that you have the right to cancel. HOWEVER, it depends on what your contract says. We all do not have all of the facts in front of us.

I would like to say this though. In thinking about this from a customers perspective. Maybe you needed to nip it in the bud when they started asking a lot of questions. Could it be that the questions that they were asking were not reflected in the contract? I also believe that you said that you were repeating yourself. Did you respond in writing? I have had cusomters like that. I have also told them that everytime they stop me they are costing me money so therefore I will billing the,.

As for them calling you repeatedly. I agree with getting it over with. They may beg you to go ahead and do it. Remember you have to be in control. It is up to us to get the client controlled. Take charge.

jimmys

are they calling? I bet they've p.o.'d every other deck builder just as they did you, and you're nicer than the rest so they're sticking after you.
I don't think one party can legally rescind a contract signed by both. However, as someone posted, if you're persistant and nice in refusing the work, maybe they'll find someone else. Probably a good thing you sent a certified letter, though. A lawyer will charge you for the opinion that you did bad, but may be able to wait them out.
I guess if it keeps playing out, they are stalking you. Maybe the PD can give you some advice at that point...
Jim

greg24k

I agree with Mitch, it depends what your contract says. Have to be careful when you enter that gray area of canceling your contract. If you cancelled without a valid reason, you will be in breach of contract. Canceling contract because customer constantly calling you and asking you questions is not a legitimate reason. You can bill her for the extra time you spent having to explain same things over and over.
You don't want to expose yourself to a situation, where the HO goes and hires someone else to do the work, because you backed out. Now let's say your contract is 8k and she hires someone to do the job for 10k, you will be liable for the 2k difference. Or if she simply file a breach of contract suit, you will be liable for damages.
I would contact your attorney and make sure you did not break any laws.

Good luck

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naptown CR

First of all a salesman is a salesman and they do make mistakes they are generally not master plumbers or mechanics.

Second you as an owner have a right to review all deals coming in the door.

Lets play for instance for a moment

You hire a salesman and for whatever reason he gets pissed off at you. He knows he is leaving your employ in a few days. He goes out and signs a deal with his friend neighbor whatever and says he is going to give them a great deal on this and brings in a contract that is thousands of dollars short. Without the management approval clause or equal right to cancel clause you could be stuck doing a job at a loss and your former employee is laughing at you. This is a very important clause to have. It is limited in time but should give you time to weed out the bad deals.