Contractor Underbid Job - Can He Charge More or Refuse to Complete It

**Winget** · 03-10-2012, 09:25 PM

My question involves business law in the state of: Ohio

I own a Lawncare business but I have knowledge in all aspects of construction but do not do it on a daily basis. One of my employees had his house hit by a tornado. As an act of kindness I offered my assistance to help them rebuild. I put some basic quotes together for them and they paid the quoted prices. I started work on the house and he helped me for the first 2 months. One day he came to me and asked when he was going to recieve his wages for working on his house. After an argument I agreed to pay the wages to resolve the current situation although I do not believe he should have recieved the wages for his own house repair. That ate $3,726 out of the money they paid but was not included in my quotes.

Now all work is complete except the interior of the garage. I am currently at a loss of -$4629.57 (over what they have paid) and still need over $2,000 in materials and another $2,000 in Labor. My employee and his wife are demanding that I complete the project out of my own pocket or get sued. What can I do or have I basically caused a disater for myself?

jk · 03-11-2012, 07:30 AM

the first thing to know is:

are you in an area that requires you be licensed to perform home repair? If so, are you licensed? If not, that puts you in a very bad position with a guaranteed loss. How much you will lose is the only unknown.

a couple questions:

As an act of kindness I offered my assistance to help them rebuild.

as an act of kindness? You charge for acts of kindness? I can see doing it at a no loss situation where they pay for materials but other than that, if you were charging for your services, it was a business transaction, not an act of kindness. Were you being paid for the work (at least in your quote)?

One day he came to me and asked when he was going to recieve his wages for working on his house. After an argument I agreed to pay the wages to resolve the current situation although I do not believe he should have recieved the wages for his own house repair.

So, was the guy working for you in this endeavor or was he doing this on his own? Did you require him to attend the work site? Did you suggest he do some particular work or did you direct him as an employee? Did you address the situation at all prior to contracting this?

Did you continue to use his assistance after this the pay situation and continue to pay him? If so, I would suggest your intent was to have him work for you from the beginning. What I would have done at that point was "fire" him from the project and finished it on my own.

Now, even if you don't consider his wages of $3726, you are still at a huge loss:

$4629.57 + $4000= $8629.57 - $3726 = $4903.57

Sounds like you had a problem with this bid from the beginning.

So, do you have an actual contract for this work? If so, you are bound to complete the work, even if you lose money. If you refuse, they have a right to seek to have the work done by others...at your expense basically (you would be liable for the "damages" they incur).

If you had not intended on the guy being an employee, you should have addressed the situation differently at the time of the disagreement. As such, it appears you have modified the contract to include his wages as part of the contract and have no real recourse on that point now. You could have possibly come out of this with very little or no loss had you handled this correctly.

**Winget** · 03-11-2012, 09:33 AM

In my area the only contractors required to be licensed is Electrical and Plumbing.

He was working on this project with me as the homeowner not an employee. He wanted to be there when work was done, He was never told to do anything. He would ask if I wante him to do this or that and I said sure. I did not utilize him at all after the wage disagreement.

There is no signed contract in play. I quoted for what I thought would be the material with only third party labor in the quote (An electrician to wire garage, and a concrete company to rebuild garage foundation).

They did sign the quote giving me permission to do the work, no official contract was drawn up. The quote stated that by signing this quote you are giving permission for (Company name) to have access to the property for the (Company Name) and any third party companies to complete work. You agree to pay the amount specified before any work will begin.

The quote was not specific to what was to be done, just stated roof repair, siding repair, and porch repair.

I know after looking back at it that I made a stupid decision, and did lose a good employee over it. Just trying to not lose anymore.

jk · 03-12-2012, 07:36 PM

the biggest problem, and what appears to have caused, at least the greatest share of the loss is paying the guy. Since you did, you kind of committed to that being what you intended. So, although your contract is not real specific, if it contains anything to suggest the work remaining was included, then they have a viable action against you should you refuse to finish it.

They did sign the quote giving me permission to do the work, no official contract was drawn up. The quote stated that by signing this quote you are giving permission for (Company name) to have access to the property for the (Company Name) and any third party companies to complete work. You agree to pay the amount specified before any work will begin.

that's a contract. It may not be a good contract but it is a contract.