Articles

Mike Judet's South Florida home was severely damaged by lightning in 2016. He accepted an offer from Cano, Inc. of West Palm Beach to make the repairs. The contract price was $300,000, payable in $30,000 installments. Cano started work. Judet made the first three payments, $90,000. Then Judet discovered a problem. Cano hadn’t bothered to take out a permit on either the plumbing or electrical work. Cano and Judet couldn’t agree on what had to happen next. So Judet stopped paying and terminated the agreement. Cano slapped a $40,000 lien on the project and sued for breach of contract. Judet’s counterclaim alleged breach of contract, asked for discharge of the lien and restitution of the amount paid in excess of the value of work completed. Now What? Continue reading →

I’m old enough to remember when plans were drawn by hand. A designer who wanted a particular detail had to physically draw that detail line by line, considering each line as it was drawn. That’s not what happens today. A designer who wants a specific detail simply finds that detail in some old plan set. The designer clicks to copy...

Anna-Becky Redlich needed some work done on the bedroom, sitting room, closet and bathroom of her Hillsborough, California home. Nothing structural. The only changes would be cosmetic. Reliance Management Group offered to do the work on a cost-plus basis. The estimated initial contract price was $250,000. The down payment would be $1,000 plus a "retainer" of 10%. If you’ve done...

The HVAC system in Elise Theyer’s historic Norfolk, Virginia home needed an update. Elise saw an ad for ductless mini split systems and called Norfolk Air Heating and Cooling to get a bid. Norfolk Air made a sales call. They quoted a ducted system on the first floor and six mini-splits on the second floor. Elise signed their agreement on...

A severe spring storm damaged the home of Jason Jenkins in Boone County, Indiana. On June 11, 2017, Jenkins agreed to have Mcgraw Property Solutions make repairs. Mcgraw promised to complete all storm remediation work for the price approved by Jenkins' insurer. The contract provided that "f the insurance company does not approve your claim, this agreement automatically terminates." The contract...

Most of what you read here is about drafting good contracts, not about bailing out of bad deals. But bad deals happen – such as to a Florida contractor I advised last week. “How do I get out of this contract?” I’ll count the ways. First, understand the measure of damages, what you stand to lose by simply walking off...

Every contractor understands the advantage of using independent contractors rather than hiring employees: No FICA or FUTA, no workers’ comp, no sick leave, no overtime. Using gig workers cuts at least 30% off labor costs. Great choice! But you probably detect problems lurking here. I’ll explain by offering a little history. Statutory Employees A hundred years ago, employees injured on...

Nearly all states require specific notices and disclosures in construction contracts. In some states and for some types of work, the list of required notices goes on and on. Worst case: California requires 35 separate notices in home improvement contracts. But anything your state requires is just the minimum. Your contracts also have to cover the price, the site, the...

“I need a rock clause.” I got that request earlier this month. I think you need a rock clause too. Here’s why. The name ”rock clause” comes from a common construction problem – rock where no one expected rock. If you do much excavation, you understand the problem: a ledge of rock or hard pan, or boulders, or a high...

I had an interesting question last week from Bryan, a Tennessee contractor. Bryan wondered why any contract needs to say that changes require mutual agreement. Isn’t that the law? Better to keep contracts short and sweet. Anything in a contract about changes requiring mutual agreement is surplus. Right? Bryan acknowledged that some owners can’t resist changing the scope of work...