Canceled Contract

stacker

here is the story,i bid a job for a privacy wall.the contract asked for a 2500.00 down payment.the only thing the contract stated was the scope of work i would complete along with buying material.the homeowner had it in his head i was going to start the next week,i never gave that impression.i did tell him i would be down and pour the footing for the wall,but it might be a couple weeks.i signed the contract on the 16th of may.weather and no help had delayed me from going down and pouring,but had it worked where i could go today and line it all out and have a man go down and dig it this week.then i would go in after he was done and pour the footer.
i go down today and the h/o comes out and tells me they have changed their minds and are going to go with vinyl fencing and that they want their 2500.00 back.my 1st reaction was and what i told them was ok,but it will take a few days to get it together.my 2nd reaction is to s&^t in one hand and want in the other and see which one fills up first.he tells me that he thought that the job would be completed by now and that they were tired of waiting.
the more i think about it,this is a breach of contract on their part not mine.coming home i reread the contract(to make sure i had no time frame in it).again there was no time frame for completing this job.my brother in law who is a general contractor told me i should hold 20% and pay the rest.i havent bought any material as of yet for the job.my question is,has anyone had this happen to them and what did you do and how did you handle it.
the contract stated 2500.00 downpayment on acceptance of the contract.verbal conversation with the h/o on the day we signed and i got the dp was that i would be going and buying material right away.but nowhere in the signed contract does it state what the dp was to be used for.
let me know what you all think.

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artisanstone

How much does this put you out? I think if it was me, that would dictate how I handled it. I've never had this happen, but I don't get money up front. I think that if this causes you financial damage, then you are entitled to recoup.

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Tscarborough

What you could do and what you should do, you already know, or you wouldn't even be asking.

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kgphoto

What do the laws of your area state?

Here in CA we have to have a start date and a completion date and can only accept 10% or $1000, whichever is less, for any work as a down payment.

I know that if I hired you a month and half ago, and you didn't tell me otherwise, I would expect you to be here pretty quick to start work.

A deposit isn't YOUR money. It is put on your ledger as a liability, since you don't earn it until you do the work, so you better not have spent it.

OCRS

Communication with the HO in the interim would have been a good idea here.

6stringmason

Honestly stacker I would just give em the money back.

I was apologize for any inconvenience, say it was a mis communication on both parts, and say farewell.

That way no bad word of mouth gets around.

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Ed the Roofer

In my contract, the deposit amount is Earned Income, the minute the 3 day Right of Recission enters the 4th business day.

At minimum, there would be a deduct being returned for time and scheduling and a lost day of work, if you actually were out there to begin the job the day he told you he changed his mind.

I try, but do not always follow through, to send out a form letter, which indicates that the hardest parto of the Home Owners duties are now over, since they chose a professional contractor to handle all of their concerns.

I reitterate a few things in this form letter that are always good and sound useful information of what they should expect during the construction tear-off and re-roofing process.

Additionally, I mention which number job they are currently scheduled as and give a range of time frames for the job start, but also notify them that when we begin on the job proceeding theirs, they will be contacted and also that as we approach the end of the preceeding job, they once again will be notified, so that they will have parked cars out of the drive way and make any addition special accomodations during the job performance.

It sounds like he lost faith in your ability, since he was not kept advised of what was going on. Had you let him know what the schedule was, he would not have had the pleasure of hearing from friends and neighbors how shady contractors just collect a deposit and never fullfill their contractual obligations, which presented a lot of doubt about your character, in his mind.

In this case, I would suggest that you either work out a new arrangement with the home owner, if that is possible, or offer to immediately give him all of his deposit back, with only a minor possibility of keeping a small amount for your time involved.

Ed

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CJKarl

I would give the money back. Consider your time spent, educational.

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