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Discussion Starter · #1 ·
Last year, I got my A-General Engineering license to install underground utilities. I was going to split the money on jobs to install utilities with some acquaintances I know who are already experienced in this field.

These acquaintances bid on jobs and we are supposed to sign a contract with a general contractor for almost $400k. At this time, I don't feel like I'm mentally prepared to deal with this job and I don't know enough about this type of work to know whether or not the estimator knows what he is doing.

Am I legally committed to signing a contract?

If so, what is the best way to get out of this predicament?

The job is for utilities for a shopping center.

What recourse does the general contractor have and what is the most-likely action the general contractor will take?
 

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GC/carpenter
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43,838 Posts
You owe nothing to someone your not contractually obligated to do anything. Just tell him no I don't want the job and changed my mind. If you were legally bound to do something before a contract what would a contract be needed for?
 

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I'm a Mac
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Other then pissing off the GC, cause chances are he was awarded the contract based on your quote as well as others, not much can be done, probably a couple of nasty emails, maybe a lawyer letter threatening you stating that the GC used your number in good faith and that was what made him win the contract, all that other wonderful stuff. You will have to respond, spending a few bucks…and when its all said and done, nothing happens.

You also just shot yourself in the foot for future business too.

You may just want to get a second opinion on the estimate provided and complete the work. Even tho its not a contract, your submission of an estimate, bid or tender is an offer to complete the work for such and such a price.

Easier way to get out of it is to disagree with the contract they provide you with, find clauses you don't like and get them changed, ridiculous things, like say ask for payment within 24 hours of billing, no holdback, etc. etc.
 

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The Ultimate Wire Hider
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Before backing out I would go talk to the GC and tell him exactly what's going on. Tell him you screwed the pooch (or however you want to put it) and that you are in over your head. He may be willing to make some adjustments or sacrifices to save his own neck.

Many times when a job gets out of hand because the sub under bidded and just can't keep up, the GC will jump in and help the sub just to save his own reputation. But in your situation, the GC is in a better position to save the job before the problems occur.

He will say either A.- "Thank you for your honesty. I'll get someone else." or B. - "I hired you because I wanted you on this job. Now let's see what we can figure this out." or C.- "It's your bed. Lie in it and if you blow this deal I'll sue the snot outta your nose!"
 

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Talking Head
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5,388 Posts
I have a more people accept my proposals than I can work for. I'm dealing with the HO so it's not the same deal but just because I tell someone what I can do it for doesn't mean I have to do it. That's the contract.

On the other hand, this might be a good project and you're just getting a case of nerves. Do you have time to squeeze in a little more due diligence? A second opinion that confirms the estimate might put you in a better state of mind. After I sign a big contract I'm always elated for about 10 minutes and then a nervous wreck for about two days. It sucks but it's so consistent that my wife teases me about it.
 

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Who are the acquaintances? Fellow subs or the GC on the job? It's sounds like backing out may ruffle a few feathers, however, backing out May be a better option rather than getting in over your head and making it worse. I would highly recommend further due dillegence on the estimate...immediately... From there make the decision: is it profitable, are you capable, can you uphold your obligation?

If you don't think it will work out, promptly discuss your concerns with the GC and others involved. Try to work together for a solution rather than dropping the ball and walking away. Some sacrifices on your behalf may save some face. Perhaps you can complete some of the scope and allow others to handle what your not able to.

From what it sounds like your bid was awarded, but have no signed contract with the GC. Generally speaking, there must be consideration and acceptance for a contract to be enforced. Verbal commitments are technically enforceable to an extent...especially if the other party will suffer a loss as a result of you breaking the agreement. When I'd doubt, speak to a contract attorney.

Best of luck
 

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Accidental Painter
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2,292 Posts
Do it. By bidding it, you basically said "I will do it for this price". Stop being jittery & stand by your word. Don't weasel out, never good. Especially if your looking for a technicality to not hold your word.

People are depending on you. Other people who have families to feed too. Don't eff them over cause your a nervous nancy.
 

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Sophisticated Siding Guy.
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528 Posts
This is exactly what bid bonding is for and is done on larger projects.

For a fee you can get a surety to issue you a guaranty that you will execute the contract for your bid amount. If you decide to take back your number the surety company will pay the difference between your number and the next lowest one.

Without a bid bond you are free to walk. I would most likely blame it on scheduling to soften the blow and not burn any bridges.
 

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GC/carpenter
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No it's illegal to back out of a non contractual agreement. Because you didn't agree to anything yet, you can be sued. :confused:
 

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Just to toss in the proverbial AH curve ball, subject to certain State laws, contracts do not have to be written, and can be oral.

With the lack of legal facts, perhaps the wording in your estimate, or evidence of your oral agreements/conversations, there may be some issues.

Probably not... just saying....
 

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GC/carpenter
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MTN REMODEL LLC said:
Just to toss in the proverbial AH curve ball, subject to certain State laws, contracts do not have to be written, and can be oral. With the lack of legal facts, perhaps the wording in your estimate, or evidence of your oral agreements/conversations, there may be some issues. Probably not... just saying....
Depending on how it's labeled. Is it an estimate or a proposed bid. Some states allow for damages from not honoring a bid. You have to meet the following criteria:

In those states which enforce the doctrine, the party seeking to enforce the bid or quotation must show the following:

A clear and definite offer by the subcontractor (supplier) to perform the work at a certain price;
A reasonable expectation by the subcontractor (supplier) that the prime contractor will rely on the price in preparing the prime contractor’s bid;
Actual reliance by the prime contractor on the subcontractor’s (supplier’s) bid; and
Detriment to the general contractor as a result of reliance on the subcontractor’s (supplier’s) bid and the subsequent refusal to perform at that price.
 

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Super Moderator
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Re: Can I Back Out Of A Large Contract Bid Before Signing The Contract?

Yea, probably so.

But you sure as chit don't want to get a reputation for that....

A move like that can haunt you for years in the commercial world...
 

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Discussion Starter · #19 ·
I'm not over my head in the project and there is not a problem with the price. The job will take about 6 weeks and the profit should be about $80k. I am (was) going to put up the cash and split the profit 50-50. Since I know nothing about this type of work and this would be a great opportunity to learn. I see absolutely no problem with completing the job.

The reason I am having reservations has a lot to do with my own personal problems that have to do with dealing with people and communicating. I spent half of my day today going over the bid with the estimator and everything looks fine. Whether or not I do this job is hinging on clear communications with the person I am splitting the job with and at this moment I am not satisfied that this person has made an effort to give me the time I need. To clarify, the partner seems to be too busy to spend the time I would like to have to go over all the business details regarding the contract, how much employees will be paid and a thousand things I would like to have clear. Before I enter into a large contract every tiny detail has to be crystal clear and we are supposed to sign the contract on Friday (tomorrow morning).

The good thing about myself (I think) is I will pull the plug on this job if the communications are blurry. I am a firm believer that not all money is good money.
 

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Personally, I wouldn't back out of a commitment due to poor communication with your partner. Screwing the GC because you made a bad partnership decision shouldn't become his problem.

I would set the record straight with your partner, establish a meeting/communication rhythm that works for you, and handle it like a professional.

The only reason I would back out is if I new for a fact the job would blow up in my face and make things worse for parties involved.

It's a tough situation and I can relate to how you feel, but I would find a way to work it out. Best of luck bud. Let us know how it works out for you.
 
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