Verbal agreement w/ unknown hours - Contractor Talk - Professional Construction and Remodeling Forum

Bhavin · 03-13-2006, 11:41 PM

Hello all,

I searched the site but didn't find any info on this. Hopefully you can help.

I am writing for my dad who is an Electrician here in Toronto, Canada. He recently did a large installation for a new factory where he had to buy $5000 worth of parts and put in about $2000 in labor.

Unfortunately, he did this all under a verbal agreement. I know what you're all gonna say, if I knew he did stuff like this I woulda made sure he changed his ways. But its done now.

Anyways, it was a verbal agreement to complete the installation but the guy claimed my dad overcharged him on the parts. The odd thing is my dad called him before each purchase to make sure it was ok with him. So we presented invoices to the customer...but now his story changed to overcharging on labor. Now here's the sticky part...the verbal agreement was done under an unknown hours agreement. My dad did not know how long it would take and the other guy agreed to this...verbally.

How solid is our case on this matter...like how likely is a court to side with the contractor on this?

Thanks for any help...and sorry if this is in the wrong section.

Sonny Lykos · 03-14-2006, 12:05 AM

Here in the States, a contractor can be reimbursed for I think what the legal system calls something like "enhanced value." In other words, your Dad is entitled to be paid for the "enhanced value" to his customer. Also here, many oral contracts are valid. Talk to an attorney.

http://www.seniormag.com/legal/oralcontracts.htm

Gordo · 03-14-2006, 07:09 AM

Bhavin,
Ask your dad if he has ever done business with this factory before. If he has been compensated for other jobs or even been given a down payment by the factory this can be construed as the beginining of a business relationship. In the eyes of the court, this beginining of a relationship can work in your dads favor. Definately consult a lawyer.

**slickshift** · 03-14-2006, 07:18 AM

lawyer up

pwrpapa · 03-14-2006, 01:44 PM

You don't need a lawyer,just smashsa his face.

Just kidding there.
Once the work commenced you had a legal contract.
It's in your Dads favor not to have a written contract, and against the client.
If it goes to court your Dad will win hands down. As long as he's not trying to pad the books on the material. I would sit down with the customer and go over the material & labor cost an work it out. Try not to get a lawyer involved, you both will lose and the lawyer always wins.

RobertCDF · 03-14-2006, 07:13 PM

Tell them that they have not paid for materials you are going to take them all back and keep them in your shop. They will pay up because they dont want to have to pay someone more to put it all in again. Not to mention all the time that the new guy is in the way.

jproffer · 03-14-2006, 09:05 PM

Quote:

Tell them that they have not paid for materials you are going to take them all back and keep them in your shop

Be careful with that one. I don't know how far along the job is, but in most states, once the materials are attached or installed on the building, they belong to them, whether or not they paid for them. If you start ripping down finished product, your a$$ will also be theirs in court.

EDIT: To finish that thought...if you went and bought the materials, delivered them and they are laying in the factory floor, then by all means, pack 'em up and take 'em away until payment AT LEAST for the materials has been received.

Bhavin · 03-15-2006, 12:01 AM

Thanks for all the pieces of advice guys. Lets see how it plays out now...

theworx · 03-15-2006, 12:09 AM

[quote=RobertCDF]Tell them that they have not paid for materials you are going to take them all back and keep them in your shop.

Like the client wouldn't have a couple of goons preventing him from doing this

. Don't make threats but sit down with the client (like your Dad did when he made the agreement) and try to work it out. Make sure you have all your documents in order and go through the job (what was done) step by step. If you're able to explain it to him in depth, he may understand. If not, I guess a lawyer is in order (that might be the kind of threat that might work). But put in your best effort to reconcile without getting lawyers and courts involved (they will cost you time and money).

RowdyRed94 · 03-16-2006, 11:52 AM

BTW, this is legally called an "oral" agreement - written contracts are "verbal" as well.

karma_carpentry · 03-20-2006, 07:52 PM

Nobody mentioned it above, but keep in mind the idea of filing a lien.

I don't know about commercial work, but it's a run-of-the-mill method of putting a little collection pressure on deadbeat homeowners. It should not be too difficult and cost a nominal fee depending on your jurisdiction. I'm not sure but it may also strengthen your case if you've filed a lien if you end up in court over this.

Search for "mechanic's lien" or "construction lien" in your province or city government website.

I'm sorry you and your father had to go through this experience. Down with deadbeats.

theworx · 03-20-2006, 08:30 PM

BHAVIN, you haven't given us an update. Really curious to how things played out. Throw us a post to let us know

???

AAPaint · 03-20-2006, 09:36 PM

Yeah man, I'm watchin this thread...throw a dog a bone..enquiring minds want to know...and all that stuff.

Bone Saw · 03-21-2006, 01:33 AM

NEVER UNDER ANY CIRCUMSTANCES, WHATSOEVER, DO ANY WORK WITH AN ORAL AGREEMENT, UNLESS YOU ARE PRERARED TO RECEIVE AN ANAL PAYMENT. BOUT 5 years ago, I did a 35sq mansard hip cedar tearoff and replace with 5/8" royals for my lawyer who I had a balance of about 7k with for child custody litigation, he paid upfront for all materials and my bottomline to him was 15k, had a contract to get paid the balance due after deducting fees I owed him (8k) well well you can guess what he did to his invioces to me, yep he adjusted them just shy paying me $100, thats right.

labor=$15,000
-$ 7,000 (work in trade)
= $8,000 (balance due me)
-$7,900 (fabricated invoicing to me

)
=$100 paid in full
Paybacks are a bitch

Melissa · 03-21-2006, 01:48 AM

My father in law went through something like this. Did the work 3 years ago and just barely finished with all the legal crap here recently, and he lost. Not sure how much exactly he wasted in legal fees. Makes me sick. He was fighting for quite a bit more money though.

On one hand I would say it's worth the try. No one should get away with that crap. But then again, it really is such a headache and so stressful!

My father in law isn't the best communicator, and we tried to help him, I put together these timelines to try and get the story clear, and my husband who was witness to a lot of it, went and talked to the attourney for him.

They were dealing with a bunch of mistakes a previous contractor did, who walked. It was just one big mess, no idea what to charge, etc.

Good luck. Keep us posted.

Bone Saw · 03-21-2006, 01:57 AM

Quote:

Originally Posted by Melissa

Good luck. Keep us posted.

5 years ago, nothing more to post except that my son has been living with me since