AB writes: On a pretty large remodel job, the contractor has not abided by the contract terms he has written up. He insisted I was limited to a “discount” granite slab he had already purchased, and if I wanted to pick my own slab, there would be a $1300 extra charge. In the language of the contract, any item that is already installed cannot be rejected. So in effect he limited me to accepting granite he already had in supply, which was not reflected in the contract.
I was supposed to get my choice of granite in two bathrooms, but he said that would be too expensive so I needed to pick one type of granite top for both bathrooms. Then the granite he supplied looks substantially different in tone than his sample. He did a horrendous match job where the granite countertop was cut for an L peninsula. The color goes from pale gold to dark brown.
I was supposed to get my choice of vanity cabinets, but he had the vanities delivered before I chose a style or color. He won’t change them so I will now need to paint the cabinets to match the countertops.
The contractor say that I am unhappy about everything. I’m not, but I am unhappy about the parts of the contract he has not abided by. Early on we had a problem with him installing a type of tub, without first giving me any choices. He did pull that tub and replaced it with the one I selected, but he seems to overreact to my not accepting his mistakes.
I asked about bigger vanities, and the cost. He never got back to me, but just installed larger ones (that I had not chosen). He is now mentioning how my job has cost him twice the money and time he planned, and that he is losing money. He said he “will not absorb the cost of any extra work.” We have only agreed upon two change orders, and so I am worried about him tacking on a bunch of surprise charges for me.
I believe he either underbid the job, or figures me for a pushover since I accepted the granite he pushed for, even though the contract mentioned nothing about being limited to “discount” or already purchased stock. The contract specifies that all extra work involving added cost will be accompanied by a change order. We only have agreed to two. How likely is he to prevail if this goes to litigation?
Steve Bliss of BuildingAdvisor.com responds: I’m sorry to hear things are going so badly on your job. Not that it’s much consolation, but disputes over change orders, specifications, and cost overruns are very common. The good news is that they are usually resolvable if both parties are willing to listen to the concerns of the other party and compromise. It is possible that the contractor gave a lowball bid, hoping to make his money on change orders and substandard materials, but hopefully this is not the case. That’s why it’s so important to hire a reputable contractor and to check references. It’s always easier to prevent problems than to solve them.
Clear and complete plans and specifications, and a good contract, can go a long way toward helping avoid these types of problems. They, help align the expectations of both parties as to what is going to be built, at what cost, and what procedures should be followed along the way for allowances, change orders, and other routine issues that might arise .They may also help you resolve the small problems that inevitably arise on any job.
The other key ingredients to a successful construction job are the people: an honest, competent contractor and a reasonable owner. The best contract in the world cannot turn a crook into an honest man. Both need to exercise some flexibility and be willing to work things out when small disagreements arise, as inevitably they will on any large construction job.
No matter how much is put down on paper, there is still room for differences of opinion on some aspects of any job. When these arise, if there is goodwill and the spirit of give-and-take between the parties, these issues are usually resolved quickly and without hard feelings. In the absence of trust and goodwill, small conflicts can snowball into a project that goes off the tracks.
It sounds like your main disagreements have to do with specifications (what type of cabinets and countertop materials should have been installed), the procedures and timing for you to make product selections, and their pricing. Perhaps the cost allowances and change-order procedures were also unclear.
Of course this is all in hindsight – now you’ve got to move ahead. In general, contracts are better at better at preventing problems than solving them. Once things have gone off track and people are upset, contracts are less useful. They usually provide some guidance for resolving the conflicts, but by this point, no one is really paying attention to the contract anymore.
The only way to enforce a contract is by litigation or arbitration. Arbitration, which is required by some contracts, can be a little shorter and cheaper than civil litigation, but is still not a practical approach to resolving disputes of this sort. Lawsuits can cost tens of thousands of dollars and drag on for years. And even if you win, you may end up collecting nothing because the contractor is bankrupt or nowhere to be found.
People generally sue because they are angry and feel aggrieved, but this is the wrong reason to sue. A lawsuit requires a huge investment of time and money. It should be viewed as a business decision and only pursued if it makes business sense, which it rarely does.
From my perspective, your first choice should be to attempt to work out a compromise.
Both parties have a strong incentive to work out some type of resolution, since the prospect of going to court is so unpleasant and unrewarding; The main leverage either party has at this point is money. If you have paid the contractor for work not yet completed or products not yet delivered, then he has the upper hand. If you have more work completed than you have paid for, and you owe him money, then you have leverage.
In any case, both parties will need to give up something up in a compromise. Decide what is most important to you and what you can live with. The best you can hope for, at this point, is a compromise resolution that leaves you both more-or-less equally unhappy.
If you haven’t done so already, it’s important that you start documenting the sources of the conflict. Take dated photos of the substandard work or materials, keep copies of all written communications, and keep a dated log of all verbal communications — in case this does end up in mediation or court.
Then, if possible, set a time to meet with the contractor to discuss your concerns. Let cooler heads prevail. Try to lower the emotions on both sides and approach this as a misunderstanding, not an intentional effort to swindle you (even if you think it is). Decide beforehand what your goals are. Do you want materials replaced, work redone, costs reduced, or something else? Explain clearly what you want and what you think is fair and see if you can reach a compromise. You may want to have a conversation with a lawyer before this meeting to get some advice on how best to proceed.
If you do reach a compromise, put it in writing as an addendum to the contract or simply a letter agreement, signed by both parties, so you both have a written record of what you have agreed to.
If you think an independent third party might be helpful in reaching a compromise, you could also explore hiring a mediator. The contractor would also need to agree to this process and both parties would to agree on who to hire and how to pay them. A mediator will try to move both parties toward a resolution, but their recommendations are non-binding.
If a compromise is not possible, you may want to terminate the contract (due to a breach of contract) and hire another contractor to complete the work. In this case, I would definitely buy an hour or two of a lawyer’s time for guidance. Laws are different in every state, and to protect yourself, you want to act lawfully. For example, you may need to put some money in escrow or file certain papers.
Contrary to the stereotype that all lawyers are out chasing ambulances, my experience has been very different. A good lawyer will usually advise you not to sue, for the reasons stated above, and will generally provide practical advice for reaching a quick and fair resolution. Often a lawyer’s letter is sufficient to move things toward a resolution. (Don’t forget to get a cost estimate from your lawyer before proceeding!)
Read more on Critical Contract Clauses