Can general contractor raise price after house is finished?

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Our house (in Wisconsin) is finished. According to the bid we accepted, we owe one final payment of $60,000 ($53,000 plus $7,000 to account for change requests during the construction process) to our general contractor. Now, right at the end, he suddenly says we owe him $73,000. He says if we don't pay it, he's going to sue us. Can he doe this to us? Here are his reasons:
1. His estimates were inaccurate, and some of his sources for material and labor ended up charging him more than he expected.
2. We bothered him with a lot of changes and supervision.
3. Our house is worth a lot more than we're paying him.
4. The house too him longer to build than he expected, and so he had to pay a lot more for labor than he expected.
Here are my answers to him on each of the four issues:
1. Regarding his costs exceeding his estimates... We had an oral agreement in the beginning that once we agreed on a project and accepted his bid that the bid would not change--up or down. If we made changes (we did make minor changes), we would be responsible for our changes. If market prices on materials were to fall, we agreed that he would enjoy the savings, but if prices went up, he would suffer the extra charges. He called this "locking in," and that is one of the main reasons we went with this contractor. On the detailed written bid he provided us, and which we subsequently accepted, he even wrote his "lock in" promise at the bottom--a few sentences. Other than these written documents and or oral contract, we have no official contract with him.
2. Regarding his claim that we bothered him with changes and supervision... He never once discouraged this or said that there would be extra charges, other than the cost of the actual changes, which we are agreeing to pay--$7,000 for specific changes bringing the total due up to $60,000. But he wants $73,000! As for his claim that we bothered him with a lot of supervision and faxed notes... He never discouraged this, and the only reason for the close supervision and notes was because his crew made a *LOT* of mistakes that had to be corrected. The work was very substandard. All of this is documented. I think our supervision and notes actually helped them get through the job and finish it the way we intended it to be finished. They were very unprofessional.
3. Regarding his claim that our house is worth a lot so we should pay a lot... Why should we be penalized because we came up with a great design and made wise choices for materials and features? He offered us a bid in the beginning, and we accepted. Now, because the house is very attractive (mostly because of the land and neighborhood), why should he be entitled to more money? His complaint is that he didn't charge enough initially, and now he's going to lose at least $30,0000, and that we should have to pay for his losses because our house only cost us $290,000 and it's worth about $450,000. First of all, I think it's worth $350,000 at the most, and even if it was worth $450,000, that would be like a mechanic complaining because he sold us an engine for $5,000 and we put it in a car we bought for $7,000, and now that car is now worth $20,000--too bad, right?
4. Regarding his claim that the house took longer to build than expected... Isn't that his fault? The reason it took longer is because his crew are slow, lazy, and inept. They made a lot of mistakes that they had to fix. Likewise, everything based on time cost about double--the dumpster, the crane, etc. In fact, this actually cost us money, because we paid four months longer than expected on our construction loan without being able to live in the house--shouldn't we be entitled for some compensation for that?
This is all causing us a lot of stress, and it sounds like it's going to cost us a lot of legal fees now, too. I feel violated. What can we do? Please advise. Any helpful information would be greatly appreciated.
Thanks, Unhappy
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Just pay what you agreed to pay, he'll go away. he's not going to file a lien.
when are you going to pay him? will it be in cash? what address will you be delivering this 60,000.00 to? time and date too
thanks
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And what if he doesn't go away? What if he sues us like he said he's going to? What if he's stupid and he doesn't realize we're right? ...thousands of dollars in legal fees later... Is there any way he could win? Wouldn't it cost more than the difference that we're arguing over in legal fees and court costs? Who would have to pay those fees? Could we make him pay our attorney fees if we win? So many questions, so little time... So many unethical contractors, not enough bullets...
I must say, our excavating/landscaping contractor was brilliant and fair, and our concrete and plumbing contractors did perfect work for a very good price. Everybody else was shite!
- Unhappy

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no way, if he ever stood a chance, he hung himself with your material price warranty
the judge would say, "mr contractor, consider 13,000 a cheap education on how to bid a job"

If you start talking settlement with the contractor, he's going to get the big head and think his request is ok it's not ok
he should validate this, he should admit to underpricing..
tell him show you where any material cost 13,000 more than original bid reflects
you're right! it's not your problem if he can't manage people the judge is going to laugh him out of the court room
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why haven't you paid him the 60,000? this much you two agree on
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C'mon, Tony. That would be a sign of good faith and the OP has no faith in contractors. Especially those they owe money to.
R
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)If) the story is as straight as this one side says it is, I would set in the 60 grand as a bargaining tool until it is settled where both sides agree. 60 thou is a sizable bargaining tool.
.

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Good advice everyone. Yeah, there are some things I will do differently next time, like a written contract. Nevertheless, your advice--both sides--is encouranging, everyone. I'll let you know how it goes. Thanks!!!
- Unhappy

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Why would anyone want one of those? ; D
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A written bid with a signature of acceptance most likely will be considered a contract.
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snipped-for-privacy@yahoo.com wrote in

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On Sat, 23 Jun 2007 14:11:59 -0700, snipped-for-privacy@yahoo.com wrote:

What is he going to sue you for? Breach of contract... Won't get past first base on that one.

Court will quickly tell him he has no case, assuming his lawyer doesn't do it first. Lawyers don't take loosing cases, regardless.

Sure, when hell freezes over.

Quite possibly a counter suit would succeed in this case.
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wrote:

Correct. I guess I should have said "Unless you are willing to pay up-front, lawyers won't take a guarnteed to loose case!" <bg>
Say that contractor walks into a lawyer's office with the story the OP gave (slanted to his advantage, of course, just as the OPs story is slanted that way, too.)
The lawyer will not handle this on a contingency, or for that matter, probably even if paid in advance (if the lawyer is ethical, please no comments on that possibility!) Instead the lawyer may say: "Try small claims court to get the max (usualyl $5K) or just ring it up to experience. and then he'll say: next time, have a written contract!
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Who is the contractor. I am also in the Wisconsin area.
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snipped-for-privacy@yahoo.com wrote:

...[snip other points I think mostly immaterial]...
The contract is the contract. What it says is what it says. The obligations of each are spelled out in it and in approved change orders to it.
Of course he can sue (or more likely, try to place a mechanics' lien on the house would be what I would guess he would actually try to do). From the story as told, probably wouldn't win, at least much. But, of course, there are almost always two sides to any story and we don't have his. :)
What you should do is take the concern to your attorney (you _DO_ have an attorney, don't you?) and let him handle it. Don't discuss dollars or payments further w/ the contractor if they get beyond the contractual limits set but refer him to the attorney. Don't commit to anything, don't do anything...
As a practical matter, however, how much _did_ materials escalate? Was there weather or other mitigating factors that caused at least some of the delays? And especially, are you being _fully_ upfront w/ him on the change orders and other requests, etc. and are there other features than those on the official change orders that ended up in the house that really, really aren't what the original plans called for? You might consider what would be a fair compromise as a fallback position rather than getting into a real battle here...there just might be at least some basis for his claim although I'll agree that to wait until the end before raising concerns isn't the way to deal with it--he should have asked for change orders or raised concerns along the way.
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All boils down to what you signed, not what the contractor or you say or think. Dave

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Hello In a court the contractor would be entitled to fair market value for his services. In construction 13,000 is not a LOT of money, just depends on the work I guess.
I'd pay the extra 13, not say, aha! you didn't put it in writing.
if contractor is getting fair market value, then 13,000 will come in quick (he should have no problem showing the court 13,000 $'s of extra work) it could run into 10's of extra 1,000's fast.
-
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So you're saying a contractor can provide a contract to build whatever. Intentionally or unintentionally, misstate the costs in terms of fair market value of services provided in that contract. Call those cost overruns, and win in court for those so called cost overruns... Doesn't sound like contract law to me.
Seems the buyer should be able to recover the same with service costs if less in the area. Not... Don't hold water. Dave
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no, you're missing the point the point is, the owner here is to the benefit of some structure built by the contractor that structure has a fair market replacement value
seems I remember the owner bragging about the value of his home how people who live in big houses don't put up with shit from generals like his
something about the community? he lives in?

or
quick
market
and
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Tony wrote:

Your argument assumes that "fair market value for services" equals "fair market value of finished product", it does not.
--
Art

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