Customer Terminates Contract

snowflake

Okay, I enter a contract with a customer. Throughout the duration of the contract, the customer keeps requesting additional work, therefore extending the time period of our contract. My fiance is my employee, and he repeatedly agrees and performs the requested additional work without having the customer sign additional work orders. Stated in our contract, all materials were to be provided by the owner. Throughout the duration of the project, we kept having to wait for materials that were to be provided by the owner, picked up some of the materials on behalf of the owner so that we could proceed with the project, and paid cash out of pocket for material (including materials for the additional work performed). The customer had deliberately provided tainted material which resulted in redoing certain tasks, which she also agreed to pay for. Long story short, I told my fiance that I had a bad feeling, that she was going to try and not pay us for any of the additional work already performed and to not do anything else until the contract was fulfilled and closed. So 2 weeks ago, he finishes everything on our contract except for the installation of a threshold because she still had not gotten the threshold. She tried to request more additional work at that time and my fiance told her that he wasn't going to do anymore additional work without a written work/change order. He informed her that unless she signed for additional work, he was only going to complete the remaining items on the contract. She didn't want to sign any paperwork so he told her to call as soon as the threshold was available. We did not hear back from her until a week and a half later. At that point she left a message on our voicemail stating that she was terminating the contract and that she had already found someone else to complete her bathroom. We had 4 days to call and arrange a pick up time to retrieve our tools or she would throw them away. We called, made arrangements. On the day that we made the arrangements, she cancelled. Said that it would have to be rescheduled for this week. I checked my email today and there is an email from the customer stating that as a result of her terminating the contract, we have breached the contract and if we don't pay her $400.00 by the time we pick up our tools, that she will take us to court and sue for the whole amount of the contract.
Now, the balance owed on the contract (minus the threshold (which was a $50 charge)) is $372. All the additional work which was a verbal agreement is $1880. I don't whether the verbal agreement is binding or not. Either way, I see it as she owes us money, not the other way around. I'm not sure if she can really do this... Has anyone ever been in this situation or know of anyone that has been in this situation?

SelfContract

Oh oh,... that's the problems you start to create for yourself from the beginning there...

silvertree

Well the extra work is legal billable work even when its a verbal contract, but difficult and expensive to collect.
If you want to file a claim in small claims court.
Did you have a legal contract form, including the 3 day right of recision, the ability to file a lein, or lead rule (if applicable).
Some will disagree with this, but I would threaten court, if that didn't work and it probably won't I would hurry up and file in small claims court.
Whoever has the best paperwork wins. Don't expect justice to rule.

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gallerytungsten

You just bought yourself a couple thousand dollar lesson. Don't buy that lesson again.

Leo G

I would let her take you to court. She is holding your tools hostage and a $400 ransom has been set, and she did this in writing. Seeing as she hired someone else to finish the job and did not inform you before this happened and admitted that she broke the contract. Sounds like you have a pretty good case against her. Record everything, if you haven't already make a ledger on all the expenses that you have occurred and make a list of things that you had done and the time it took to do those sub-jobs.

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nEighter

gawd man.. good luck

joasis

File a police report for the tools, file a lien on the work completed, and document everything......tell her by e-mail you are placing a lien on the property and you will see her in court, and add the amount of the tools.....give her something to think about.

And, if this doesn't work for you, like you found out above, you pay for your education.

And.....if you don't know now, you never leave a job site for more then a day without taking everything with you, ever.

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Framer53

Where do you live? There are some things that vary by state.

kevjob

Why are you allowing her to cancel YOUR contract? breaching is not what happened here, but she smells blood and went for the jugular, call your lawyer and get all you tools back tomorrow with police standing behind you at her door at 6am.

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Basement Finishing Highlands Ranch Colorado
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Warren

why is the customer providing the materials? Why would the customer sobotage their own job by providing tainted material only to have to pay you to redo it? Sounds fishy.

DavidNTX

A contract is supposed to protect everyone. There has to be a reason to break a contract and desire is not a reason.

You may never see those extras. Even if a verbal contract is binding. The HO stated she wanted work done and your employee did the work apparently for no price. A verbal contract would also have to include amounts and times if that is to be considered.

It sounds to me like she is trying to bluff you. I would call her bluff and start by going to collect your tools. If she refuses or if she reschedules again then file a police report and do as mentioned above, go retrieve them with the police behind you. Keep a good solid paper trail from this point on. Don't accept anything verbally, even the promise of a check. Get that in writing then you will get paid.

Once you have established that you aren't bluffing send her a demand letter for the remaining funds. It might be worth the bux to have a lawyer write the letter for you.

Whatever you do don't let your lien rights expire. Sometimes they aren't very long. They vary from state to state so check the lien laws in your state.

These lessons are expensive but they teach you things that you will never forget again.

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Tiger

I have to constantly remind myself to contract for the extras. I lost $1k on a job last year with a guy that looked me right in the eye and told me to bill him on extras. I got the lien but not the cash. It's the best I can do for now.

I lost $5k on another job last year. It was a clear breach of contract that would have cost over $5k to collect. I had a nice talk with my lawyer about it and the best solution we came up with is to have minimal final payments. Some greedy people see that large final payment as being worth going after and don't mind some legal fees to get it. Nobody will hire a lawyer to cheat a contractor out of $500.

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BobsLandscaping

Get paid before you start the work. A change order costs $75 plus the cost of the extra work and must be paid before the work is performed. Keep ahead of the money.

BuiltByMAC

Snowflake, SelfContract answered it for you. You set yourself up by doing change orders w/o any paperwork to back them up. Now you know.

I'm thinkin' you might have the gender wrong there, n8r!

Mac

Chris Johnson

I have a client that has owed me 5k for over 12 months. I usually try and work with people and help them out, such as waiting for funding, etc. This was for foundation ICF walls and floor system totalling 128k. Now the HO is trying to nickle and dime things, claiming backcharges for this and that, you know typical crap people pull when they don't want to pay or have any money, really starting piss me off actually.

I did agree as part of my contract to talk with the other subs in regards to attachment to ICF, to date not one has called me, they have had issues, the client feels this is partially my fault, refer to paragraph one nickle and dime, typical crap etc.

Being as how I am busy I never had time to review everything, I send a statement every 30 days for balance due, I usually receive an email with some lame excuse or bitchin and whining about something, most recent was I had to pay them to do additional work to the window bucks since the guys they hired did not know how to attach to ICF, again I got no phone call, so I am getting tired of this ****.

Finally sat down and re-read my contract from January 08...hahaha, way back when it was signed the contract included not only ICF and floor system, it also included the roof system, top plate, trusses, stick frame, sheeting for 86k. Son of bitch I think, they hired someone else (Guy wasn't a hack, just cheaper) for 65k to do the roof, but I am still under contract to complete the roof, never a change order, letter or anything between parties.

This months statement goes out with the outstanding 5k owing plus the profit loss from the roof system about 20k...let's see where this goes now, but from what I have read and understand this is a slam dunk if I wanted to pursue it.

And if the client does surf the net and read this, Kiss my A$$

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buildiq

Couldn't say it better myself. For such a small amount I believe you're either going to negotiate your way out of this directly or learn an expensive lesson. Unlikely this will go to court, even small claims.

As an aside for documentation - I would suggest fax or registered mail rather than email, some contracts are funny about electronic communication and it's not as reliable anyway.