Cancelling a contract

J.C.A._3

This IS what seperates a "salesman" from the FACTS !

If he/she really wanted to sell a job where there is any question, they would call an installer to make the difference apparent. The installer may also see things that need to be adderssed in accordance with current codes,that they may have "overlooked".The installer may also see things that "need to be addressed", that the salesman didn't notice even if there weren't any code questions.
I have to say that in the last few months, Mr. Milne and I have both looked over jobs that we are bidding on, and there are times that he sees things that I don't, and there are things that I see, that he didn't. It works to make a better, and more qualified bid for the job at hand.

Granted, there are times when we butt heads over some points, but at least we LOOK at them and qualify the job BEFORE bidding. Hopefully, we do it right and get the job. If not...we have all the numbers to fix it after someone else blows it..... Chris

Unknown

Lets say

for some reason a potential problem wasn't picked up on the day of contract signing ( old boiler that won't fit out of a house is a good one ) . Of course cutting the boiler up adds some money to the job , but the contract is already signed without the extra money , and the contractor doesn't know about this headache till they're going to start the job .

The customer gets the usual 3 day backoff period to change their mind , but how are contractors held liable to a contract that needs to be changed ? In this hypothetical , does the job have to be done at the contract price no matter what ? Can the job be cancelled by the contractor if the price has to be changed and the customer is not willing to pay ?

Thanks in advance , Ron .

Leo

Not an owner

I'm not an owner but I do know the more jobs done the more the chances of a mistake happening. So, if in the example listed it cuts into the profit of the job so be it. A contract was entered with the consumer to do X for Y. At the end of the year if the company is in the black with a few bruises then all is fine. The reputation goes a long way taking it on the chin once in a while. I have a used car dealer friend who follows this. He warrants everything he sells. He says on occasion he looses his shirt but at the end of the year he is way ahead of the pack. He does so well he NEVER advertises.

Leo

Brad White_9

Without a full disertation on contracts...

It all goes to what the parties agree to, not just to include but to exclude. Exclusions are often just as important.

How appropriate that so many of these items are included in what is called "Boilerplate"

All a contract is, is a meeting of the minds. Party A agrees to do something for Party B for consideration (money usually!)and usually within a prescribed time period. Add to that payment means, schedule, special conditions and so-on to flesh it out.

Does the contract in question have standard exclusions? Acts of God, abatement to be taken care of by others (e.g.: the owner) as a couple of examples.

Right of Recision laws (the three day cooling off period) generally are under consumer not contractor protection statutes. I would not seek relief there.

I think if you are an honorable contractor and of course you are, you can revisit the Owner and discuss it, saying, just to clarify, were you expecting us to take out the old boiler? OR, we can do that for X if it is not clear. Or you can say, we missed it, want to do a good job so will eat the difference.. it is all what you negotiate. Many variables...

Unknown

Yeah

I kinda thought it'd come down to " it depends " . I know the 3 day cool off is for the customer only , just thought I'd bring up the point . The absolute worst job we had was on a steamer replacement in Queens NY . The steamer wasn't so bad , but connecting to the old brass pipes for domestic water became a nightmare . I remember we were there to well after midnight trying to fix all the thread leaks because we initially disturbed the system . You know , you turn out a nipple , then the tee the nipple in leaks . Times that by 20 .

Thanks alot Brad .

Dave DeFord_2

Not a contractor..

But I have owned a couple of businesses. You need to honor your contract. You have apparently already let the homeowner know that you didn't measure the old boiler. Not good because it doesn't make you look smart to the homeowner. On the other hand the homeowner knows that you would just as soon be out of this contract. If you fulfill the contract it will enhance your reputation of being a stand-up contractor - this is invaluable. Education is an expensive thing to get - sometimes you pay the trade school, sometimes you pay the school of hard knocks. This is one of those hard knocks situations. This education is expensive but in the long run it is not so expensive because I'm sure you will never make this mistake again. Live and learn - even though it hurts sometimes.

Unknown

Chris

On the bigger jobs , someone else is always called in to look over the complete system . It's these 1 or 2 zone replacements that can throw someone for a loop - especially when theres a 1000 lb. Fitzgibbons in a home where it's not supposed to be . Most would just assume its cast and can be split .

Or the times where there's aircell under the cover . Since asbestos is usually not spelled out in the contract if it's not seen , we always get the extra money for the extra work involved in that area .

Thanks Chris .

Unknown

It's a good policy Leo

as long as it don't happen often . It doesn't for us , simply because most homes in each certain area have the exact same equipment and setup . Just once in a while someone will build a room around the boiler or an oil tank , and it won't fit out like someone thought it would . Or the turns going out the house are too tight . Or.... the one time we had to install and remove a steamer down a tight spiral staircase ( we wound up shoving the sections through a tiny casement window ) .

Thanks alot Leo .

Bill_68

Be Careful

Ron,

The key phrase is "...but the contract is already signed without the extra money...".

Word get around fast about contractors that avoid work responsibilities with accepted contracts, since a signed contract is what we strive for. Customer's do not have the same concerns and most judges will side with the customer.

Reputation, goodwill, etc. must be weighed against the "walk-away" price. However, if one can show that an arithmetic error was made in a take-off or prove otherwise that there is no way something would have been known in advance, the contractor might have a better chance at an change order or the customer allowing the contractor to get out of the deal.

"CYA" clauses, exclusions, etc. are just as important as what is included and the bid amount.

Bill

Unknown

Bill

I work for a company that has a very liberal policy when it comes to situations like this . We always try to make sure the customer is satisified with every aspect of the job . I was just curious about how contracts can be handled in the legal sense if a gross error is made on the contractor's part . A few weeks ago a homeowner asked on this forum for advice about how to handle a contractor that didn't install a liner in his chimney ( as per the manufacturer's instructions ) . Since it probably was not spelled out in the contract , in a legal sense is the contractor obligated to line th chimney for the original cost ? Things like this happen quite often .

Bill_68

I understand totally Ron. We have always been jokingly jabbed for excluding so many things. Comments like "are you INCLUDING anything!!"

It doesn't matter to me what they think...I just know it is best to try and CYA.

"Gross error" can be defined in many different ways. My "Gross" might mean something entirely different to the other party. My "Gross" might have to be proved...the other party has time to think about his "Gross".

I know a GC that was able to get out of a $1,000,000 bust because he could prove that he left out the entire electrical subcontractor bid and the related markup on that sub. The GC was handed back his Bid Bond (5% of his $25 million plus bid)and the job was awarded to the 2nd place GC bidder. This process took about a month to get legally loose without having to be exposed to the $1,250,000 bid bond guarantee and/or the $1,000,000 loss before the job even began. The estimators simply laid out all the facts, all the estimate sheets, everything, to the owner and architect.

Certainly this is an extreme example and most HO's do not require Bid Bonds, and most, if not all, will understand an honest and reasonable discussion about the problem. A contractor should always be prepared to SHOW the customer what is in the bid and what isn't though.

Walking is really never a good option unless the client has changed the rules of the game. CYA...

Bill