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Discussion Starter #1
Hi all,
I'm new to the forum, and also a new General Contractor.
Here's my scenario:
Shortly after recieving my Contractors license I contracted with one of the local home improvment stores as a start to my business.
As you can imagine, at times this is a major "PIA" and just barely worth the efforts put forth.
Anyway 1 of the jobs that I estimated was for a kitchen cabinet install, probably a 4 day job granted everything goes right. I sent over my bid, which was then accepted and a PO# sent out resulting in me scheduling the job. The homeowner decided 24 hr prior to the install date to cancel. I am not called, but informed through the home improvement store. I at this time am a little frustrated, but let it go, and fill my 4 days of free time with other work. I find out 3 weeks later that the homeowner cancelled because they found an unlicensed contractor that will do the job for alot less than I can. As you can imagine I am enraged about this.
My questions are as follows:
I took on a degree of risk when I sent a bid over, and agreed to the job for a set fee, I'm tied to this number if anything goes wrong. Shouldn't the homeowner or home improvment store be tied to this number granted anything goes wrong on their side?
Am I entitled to my estimated profit?
I called the contractors board and reported the unlicensed activity, I was going to send a bill for estimated profit, a notice of completion due to the cancelled contract, and a notice of right to lien for the face value of contract. Am I right or wrong here?
I normally would let a cancelled contract go, but as you can see the events that took place are a complete slap in the face to me, and anyone else who is licensed, insured, bonded, and running a legit business.
thanks,
DK
 

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Knight of Ni!
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I'm afraid you are going to need thicker skin. Get used to it, we all deal with flakes to a certain degree. A building contractor buddy of mine will not allow his clients to go to the two biggies (OK strongly suggests they don't) for kitchens because of many problems related to this. They also have this attitude problem, because they're so big I guess? Cheers! Met
 

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dmkhnr, I agree with you. Situations such as yours really piss me off. Can you do something about it? Maybe, depends on your contract wording and the laws of the state you live in. Its probably too late now for this job though. I would find a construction/contract lawyer, and have them help you put some wording in your contract that addresses this issue. At least in the future, you know what you can or should do.

Good luck :Thumbs:
 

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General Contractor
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Like Pro said - it depends on your contract. You should have a loss of revenue clause (or something similar to that). We ran into a similar situation on a large commercial clause as a GC. We had a CM over us who was acting as the owners group agent. He had made a deal with a subcontractor to do flooring - and behind the scenes had sent a Letter of Intent (not even a contract) to the subcontractor. The whole story still hasn't come out but it's been guessed that the CM was getting kickbacks.
So long story short - we have to honor the letter of intent even though no formal contract was executed. Of course we don't want to use this contractor as their bid is so much higher - but it's cheaper than paying for their loss of revenue and hiring another sub.
So even if your contract doesn't have a loss of revenue clause you may have some recourse - if you're even interested in persuing it.
 

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Painting Contractor
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Is a loss of revenue clause sort of like a restocking fee for returned special order items?
 

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I don't get it. THe homeowner bought the cabinets from the big box store and then asked "them" to install them, so you were to be "them", you sent in a bid and scheduled the job. The homeowner then decided to cancel the installation and just buy the cabinets from the big box store and take care of finding an installer on their own. Is this the correct scenario? They didn't use an unlicensed contractor through the big box store right?

I don't see how there is anything to do or say after the homeowner decides to cancel unless the big box has a cancellation clause that involves you, or you have a cancellation clause that involves them. The installation part of the job was cancelled as far as you and the big box are concerned and the homeowner then does whatever they want to do.

The only way I see you should get anything out of this is if you have a contract with the big box that addresses this issue. Being a big box and the one sidedness that they can force upon their vendors I can't imagine that you have a clause like that, nor that the big box would ever agree to one. I have never worked for a big box, but I would assume that you would be working off of their contract and not the other way around.
 

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General Contractor
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Humble Abode said:
Is a loss of revenue clause sort of like a restocking fee for returned special order items?
Kind of. It's essentially saying that I've scheduled your job and/or rescheduled other jobs so I expect a certain profit from this work during the timeframe the contract states - therefore if you back out of the deal after we've executed a contract there's a possibility that I won't be able to realize that profit. Not too often does it play out that way as most often the contractor can re-schedule some work.
 

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General Contractor
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In this situation Mike (after re-reading the original post) I tend to agree with you. A PO# without a contract or purchase agreement (between the OP and client) is pretty much meaningless. If a contract was signed - then that's a different story (my original assumption).
As Mike was alluding to - cancellations of estimates happen everyday. If 5 people submitted bids - 4 have cancelled estimates :)
 

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Discussion Starter #9
Thanks for the replies,
I'm not willing to put any more time into this than making up a few bills, and mailing lien documents granted I'm in a position to do so. (seems not)
The cancelled install isn't what triggered me to think this way, its the fact that the homeowner hired an unlicensed scab to do the work. Had it been another Contractor and pure competition that won the job, who am I to complain.
It took me 5 minutes to fill out a complaint form with the NV State Contractors Board, who will in turn be at the home today citing the unlicensed Contractor.
I guess thats my sweet justice!
DK
 

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dmkhnr said:
Thanks for the replies,
I'm not willing to put any more time into this than making up a few bills, and mailing lien documents granted I'm in a position to do so. (seems not)
The cancelled install isn't what triggered me to think this way, its the fact that the homeowner hired an unlicensed scab to do the work. Had it been another Contractor and pure competition that won the job, who am I to complain.
It took me 5 minutes to fill out a complaint form with the NV State Contractors Board, who will in turn be at the home today citing the unlicensed Contractor.
I guess thats my sweet justice!
DK
but one thing it is the home owners word and his word against yours if they both say he is family and they just paying him ciggerate money to do it
had some one try it with me said i was in violaton just because my price is lower than his and the area i work a license is not requird so should i get poed at some one who dose this as a side thing and not full time like my self
 
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