Sample consumer-friendly contract

[orangele2003]

I am currently having a deck demolished and rebuilt for me by a local contractor. He has taken every opportunity to charge me "extra" labor costs. He pitched to me that he was a "master craftsman" with 26 years experience.

He charged me 2 1/2 hours at $75 an hour to unload wood for the deck and "examine" each piece. Please note I rented a fork-lift at my expense and there were five batches of wood, so it could not have taken more that 30 mins to actually unload the wood from the truck 75 feet to my driveway.

He charged me $65 an hour for 10 hours since he says the existing (3) posts were set deeper than he "could have anticipated" and thus he had to rent a bigger jack hammer (at my expense) to dig them up (they were set at about 3 feet depth). Interestingly, he then set his replacement posts at the same depth of 3' so if he did this, why would he not anticipate that the previous contractor might have done this as well? Now he wants to charge me "extra" labor costs again to provide flashing between the deck and the house which was not present. He tells me that this should have been done originally. Well if this is the case then shouldnt this be an anticipated step and not considered "extra" labor.

Bottom line is how can the consumer protect themselves from the contractor continually adding labor costs by claiming something is not anticipated, or covered in the original bid? I imagine there is virtually no job that there is not something that is not anticipated, and without some type of specific language in the contract, the contractor can use this to screw the consumer. Are there any consumer friendly contractor contracts that people have, that I can use in the future to prevent being continually screwed by a contractor.

[mrsgator88]

OK, now we have a little more info. But lets have all of it.

1) Do you have a contract? 2) If so, what does the contract say? 3) If not, what were the verbal terms? 4) How big is the deck?

Any contract will be written to protect the contractor, since he has a lot more to lose than you. To protect yourself, get written quotes because they will also state the terms. A quote is often a contract just waiting for your signature! Each will be different, so just reading them all you'll get a little better idea of what you want or not in a contract. Remember, its all negotiable.

Also, and nobody does this, have a construction lawyer look over the contract. Things that seem obvious to you are not so obvious in a dispute. For example, the payout schedule. Often this will be "payment of $xxx upon completion of nnnn". At what point is something complete? When the contractor says its complete? Or when he's passed inspection for what he's completed? When are adjustments to payouts made? If you owe $xxx upon completion of plumbing, and you supplied fixtures he was supposed to pay for, do you adjust payment at that time or at the end? What if his 12 week estimate turns into 12 months? What happens if he puts the posts a foot too close together and now your deck is smaller than its supposed to be? What if he abandons the job? Do you have a clause that defines abandonment, and the consequences? What if he's a 65 year old sole proprietor and he dies mid project? What happens to the advanced money? A good contsruction lawyer will think of these things. A lawyer who doesn't think of these things may be a good lawyer, but not a good construction lawyer.

S

[dpb]

mrsgator88 wrote: ...

The former is only true if the contract is biased in favor of the contractor, not a general condition of "any contract". I don't see the basis for the latter assertion, either.

That a contract favors one party over the other is not a tenet of contract law--a good contract should protect both parties and be an equitable sharing of both responsibility and risk and include, of course, as detailed description of scope and individual responsibilities, etc., as is practical. It is, in fact, possible for a contract which is excessively one-sided to be held unenforceable for that reason.

I'm certainly not a lawyer, but know at least some basics... :)

[mrsgator88]

I took two terms of business law, and I remember learning about how its possible for contracts to be unenforceable. But stupidity is not a reason to void a contract.

And I'm also in the tail end of an extensive building addition. I've seen how its very possible for a contract to very much favor one side and be perfectly legit and enforceable. Among other things, I got caught in the vagaries of the payout schedule. It seemed clear when we signed the contract, we'd pay a certain amount as each piece of work was "completed." Since we never defined what "completed" was, the builder got to decide. This caused lots of problems because he was able to demand money from us that we felt hadn't been earned yet. He'd then take our money and disappear for weeks or even months. At one point we told him we're not paying until WE felt that portion was completed, and he threatened legal action.

In the end, we will be getting close to what we contracted for, and the builder will get paid close to what he was supposed to get. The middle part got pretty ugly however, and we had almost no leverage, and the builder really took advantage of that.

S

[dpb]

..

No, no claim of such was made???

...

Yes, it takes an extreme case usually to actually get it voided for the reason of bias alone. I was simply trying to emphasize the point that the intent in contract law isn't to favor one party over the other. But, in general, you're correct, it is the responsibility of each party to ensure their own interests are protected adequately.

That's perhaps an example of an incomplete or ambiguous contract, or it could have been written specifically that way on purpose and got through. Was it clear from contract language the builder was the sole arbiter of "completed", or did he just assert it?

And, yes, writing complete (and fair) contracts _is_ difficult which is why there are lawyers, amongst other reasons. And, of course, there is still the fact that fundamentally, even good contracts are only as good as the signatories' willingness to live up to them. If sounds like it would have been quite likely in your case even if there were provisions for "mutally-agreed completion" the builder may have been one who would still have pushed for early payment.

The difficulty in most building or remodeling scenarios is that the builder generally starts with a standard contract form that may well be (probably is???) at least mildly biased in his favor and the client is in the position of having to press for inclusions (or deletions) of provisions to more nearly balance it. Most often they don't take the time or effort to fully appreciate the necessity of this and may feel some pressure to take it as offered because they particularly want the specific builder for various reasons and are afraid to risk losing him. Other disadvantages include simply not having the expertise to recognize potential trouble spots such as the omission of who arbitrates in case of dispute or how decisions such as in your example are made. Builders with a reputation may have the luxury of being able to say "take it or leave it" as they have all the work they can handle anyway, so it isn't necessarily a totally level playing field from that standpoint, either.

[bambam]

From your two years of business law, you will recall that clarity (capable of interpretation) is one of the conditions required for there to be a contract, and no doubt you will also recall that where there is ambiguity, the contract is interpreted *against* the interests of the author.

This is very true. Which is why my contracts are short and simple. Two pages, max. Plain english.

If the client wants to wriggle out, I'm happy to lose him. If he acts badly, I'll dump him. Contract or no.

Ken

[dpb]

...

...

While I didn't take more than a couple courses and had some additional seminars on business law, not even close to two years', I do recall that :) And while true, for that to occur would almost certainly require a formal adjudication process in practice. The question (nearly rhetorical, but of at least passing interest in the particular instance) was whether it was unambiguous as to who determined "substantially complete" for progress payments and in case of disagreement were there defined rules or did the contract simply not say and so it defaulted to the (apparent) pissing contest? (Or, of course, it could be that neither party actually followed the terms of the contract itself which might have had all these things spelled out--not likely w/ the given information, but no way to know for absolute sure.)

But, in all matters substantial, it would appear we're in essentially complete agreement.

[bambam]

Is that like substancially complete agreement?

Yeah, we share the key sentiments on the issue of fair minded contracts. .

Ken

[mrsgator88]

More than extreme IIRC.

No it wasn't clear, and he just asserted it.

Yes that's true. What would have been better for us would have been a definition of when a phase was "completed." Like the plumbing for example. He said it was done when he was finished roughing it in. The inspectors had almost all of it ripped out and replaced. Some sections had to be replaced a second time.

There's also the issue of trust. We didn't feel the need to analyze the contract language to that degree. And chances are, had we re-worded the contract, he'd have accepted the changes. When we signed the contract we never imagined being in an adverserial situation with our builder.

There was no arbitration clause in our contract. I would not have accepted that.

S

[mrsgator88]

Yeah, but to get to that point meant suing him while the house was quite unfinished and waiting three years before going to trial. That was not realistic for us.

This was a one page contract, plain English.

Yes, our contractor many times suggested we fire him. I told him no. Funny that he wouldn't quit the job however. The contract didn't address mid-project cancellation. That's where I had some leverage.

S

[mrsgator88]

The contract didn't state who decided when a phase was complete.

No defined rules. Pissing contest insued. Contractor said pay me or you're in default and the work stops.

S

[dpb]

Since we sorta' went on without you :) , I'll just respond in one thread...

The comment regarding who arbitrates wasn't meant as an arbitrater-only option necessarily, but simply referred to any definition of a dispute resolution process. As you note, without one, essentially any disagreement may descend to the lowest common denominator and the knowledge that resorting to a legal battle isn't helpful to either party.

It's also very common (almost universal?) for folks to not think they will ever be in an advesarial postion with their builder, but it will be almost as uncommon to _not_ be some conflict before a major project is over.

The example simply illustrates very clearly the old saw of "the devil is in the details" and the importance of serious review of a contract by impartial and experienced eyes.

In this case, the simple expedient of requiring work to have passed appropriate inspections, etc., before acceptance could have alleviated a lot of heartburn, apparently. But, granted, going in, one never thinks the contractor would do substandard work so it isn't routinely thought of to include such specificity.