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Can I Void A Contract My Project Manager Signed?

 
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Old 08-23-2010, 06:39 PM   #1
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Can I Void A Contract My Project Manager Signed?


Well, I think my manager is doing under the table deals with a subcontractor. Paying him big bucks and taking a cut. Anyway, i always elt my project managers make and sign the contracts for their projects with other subs or piece workers, we're also a sub. Anyway, does my company , me, have to honor a contract not signed by me, owner? I want to make a sub re-negotiate.
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Old 08-23-2010, 07:06 PM   #2
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Re: Can I Void A Contract My Project Manager Signed?


Either your PM has the right to sign binding contracts on behalf of the company, or he doesn't. I would hope you have something in writing covering that aspect of his job.

Does your contract with the sub contain a clause allowing either party to cancel within X days? It should. As the company owner, you would have the right to cancel within that period.

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Old 08-24-2010, 10:42 AM   #3
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Re: Can I Void A Contract My Project Manager Signed?


This is really a question for a lawyer, but off the top of my head:

The employee is an agent of yours. Generally agents are authorized to act on behalf of their principals (you).

You have to look at it from the perspective of the sub: He thinks he's signing a valid contract because this guy is your employee who you've authorized to sign contracts on your behalf.

The monkey wrench is if this employee is inflating the prices to line his own pockets. I have a feeling if you asked a lawyer, he would say the contract is valid but you should sue the employee for damages.

Again though, you should ask a lawyer, especially if it's a significant amount of money.
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Old 08-24-2010, 01:24 PM   #4
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Re: Can I Void A Contract My Project Manager Signed?


I'm no lawyer either, but here's my take. If an authorized employee signs a contract, as a company, you should honor the deal. Unless there is proven fraud/collusion taking place - to me, all bets are off at that point. It takes two to make these deals happen. Get rid of the employee, get rid of the sub(s) that are taking advantage of your business. Take em to court if you have the resources, if not, do your best to avoid them in the future, and spread the word about these crooks.
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Old 08-24-2010, 01:39 PM   #5
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Re: Can I Void A Contract My Project Manager Signed?


Quote:
Originally Posted by ryanjm View Post
This is really a question for a lawyer, but off the top of my head:

The employee is an agent of yours. Generally agents are authorized to act on behalf of their principals (you).

You have to look at it from the perspective of the sub: He thinks he's signing a valid contract because this guy is your employee who you've authorized to sign contracts on your behalf.

The monkey wrench is if this employee is inflating the prices to line his own pockets. I have a feeling if you asked a lawyer, he would say the contract is valid but you should sue the employee for damages.

Again though, you should ask a lawyer, especially if it's a significant amount of money.
X2... he is an agent of your company....
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Old 08-24-2010, 02:37 PM   #6
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Re: Can I Void A Contract My Project Manager Signed?


but in the ernd it is YOUR company and I wouldn't hesitate to call the sub in and tell them that they have to re-bid their portion and YOU will review it. Unless the work has already started in which case I would call the sub in and tell them the scope of work has changed and they need to re=bid or something along those lines. I would be damned if I would sit back and let one of my employees skim off the top. Maybe be honest with the sub and tell them you suspect there is some skimming going on? Or get another sub to bid through you, to compare the costs?
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Old 08-25-2010, 06:27 AM   #7
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Re: Can I Void A Contract My Project Manager Signed?


Guys, I believe the sub would have full knowledge of whats going on - he'd be as guilty as the employee. Subs price is x. Employee marks it up to x + y. GC pays sub, then sub and employee split y. I've heard of this happening before, usually when construction is booming and there's not a lot of checks and balance in place, and minimal oversight. There's no way a contract to those terms would be valid. I'm sure the GC would have the right to terminate the contract.
In the mean time, it would definitely make sense to put a clause in the boiler plate to protect yourself. Also, more oversight???
To the OP, whats your hunch that the sub and employee are skimming?
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Old 08-25-2010, 07:46 AM   #8
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Re: Can I Void A Contract My Project Manager Signed?


There is no easy answer here without knowing more facts, and seeing the actual contract that was signed. However, in every contract there exists an implied covenenant of good faith and fair practice.

If I understand correctly, you are a sub, and you use subs to complete the work. Your manager is contracting, on your comapnies behalf, with these subs. You feel that the manager is allowing/colluding with the subs he is contracting with to increase the price, and then some of that inflated cash is getting kicked back to your manager.

A few questions that must be clarified - was your manager duly authorized to sign contracts on your companies behalf? (From what you wrote the answer appears to be yes)

Did the manager and the sub he contracted with collude to defraud you of principal, and, can you prove it? Can you follow the money trail here?

How big is the contract we are talking about, cash wise? This will help you determine if it is worth fighting or chalking up to a learning lesson.

Depending on the answer to the previous question, your best bet maybe to send the manager packing, and tighten up the controls within your organization (yes, you incur some fault here too).

Just as an aside, you should add a termination for convenience clause to your contracts.

Last edited by DPCII; 08-25-2010 at 07:52 AM.
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Old 08-31-2010, 07:28 PM   #9
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Re: Can I Void A Contract My Project Manager Signed?


You want to keep and renegotiate a contract with a sub who is inflating his costs and kicking back to your dishonest PM?

The sub is breaking the law, why keep him?
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Old 08-31-2010, 08:49 PM   #10
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Re: Can I Void A Contract My Project Manager Signed?


Other than this stealing, how's everything going? Are the jobs getting done and profits being made? If everything is cool I would let the stealing continue under the radar. In fact, this arrangement your PM has with the subs could actually improve the level of service you're receiving. If the money is coming out of your pocket, I'd fire him, but if not and if things are running nicely, let them enjoy their little games.
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Old 08-31-2010, 08:52 PM   #11
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Re: Can I Void A Contract My Project Manager Signed?


Quote:
Originally Posted by RH-Electric View Post
Other than this stealing, how's everything going? Are the jobs getting done and profits being made? If everything is cool I would let the stealing continue under the radar. In fact, this arrangement your PM has with the subs could actually improve the level of service you're receiving. If the money is coming out of your pocket, I'd fire him, but if not and if things are running nicely, let them enjoy their little games.


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