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HELP! probably going to be sued...

Discussion in 'Business Operations' started by littleredwagon, May 6, 2008.

  1. littleredwagon

    littleredwagon LawnSite Member
    Posts: 18

    Okay, so here's the deal, and yes I know I'm dumb, but bare with me.

    So I have this friend who was a subcontractor of mine, now he's an employee performing work for me, basically as a subcontractor just without the title. I've given him 95% of the money available and the job is not yet complete. There are still four walls, and two sets of stairs to complete.

    The job went overbudget, because all of our supply prices have nearly doubled due to fuel charges and whatnot. I know I should have shopped everything out, and I KNOW i'm dumb for not, so don't post if you're not here to help.

    What are my obligations as far as the contract go? I have my guy listed as a 'specialist' who is to perform the works. As well, it's common knowledge that he has received all of the money for this job. By common, I mean both the house owner, myself and the specialist all know this.

    My specialist wants to raise the price, and so do I. The homeowner is not willing to budge. Do I have the right to raise the price, even though we have a contract with a bid for the allotted price? I did not place a "not to exceed" clause anywhere in the contract, so I am just wondering.

    Help.. and thanks.
  2. Woody82986

    Woody82986 LawnSite Silver Member
    from DFW, TX
    Posts: 2,128

    So you have a contract that says you will do this, that, that, and this for X amount of money... correct? If that is what the contract states and both you and the homeowner signed the contract, it seems to me that the homeowner is simply wanting what he agreed to get for the price he agreed to pay. However, depending on how well the contract was written or whether you let a lawyer look over the contract to tighten the loopholes before you took it to the homeowner, maybe you have some shaky ground that a lawyer can weasle you out through.
  3. Robertsonslawnsinc

    Robertsonslawnsinc LawnSite Member
    Posts: 74

    your name is more important then making money off this Job we all have under bidded Jobs before suck it up and. "D W Y S Y W D"
    I hope you know what this means...
  4. Toy2

    Toy2 LawnSite Bronze Member
    Posts: 1,924

    You will have to eat it, is it worth the cost of a lawyer and your name dragged though the mud?

    Of course not, so you lose your a$$ on one job and learn from it.
  5. JFF

    JFF LawnSite Member
    Posts: 248

    Some lessons are expensive. Lawyers only increase the expense.
  6. littleredwagon

    littleredwagon LawnSite Member
    Posts: 18

    yes i know what the acronym stands for. no i don't WANT to get a lawyer, but we have absolutely no money to work with on this project. it's my second time using a sub, and most likely the last. not a single complaint on our service, or price in over a year and a half of business.. but for some reason, whenever i rely on someone else to do their part, this sort of thing happens. i'm just trying to cover my bases. I still have the sub on site today, trying to get as much done as possible. I'm just taking care of the 'whatifs'. Trust me, we're a company with integrity, but I also would like to know my outs. =)
    thanks for all the help guys, i truly do appreciate it. keep the advice coming
  7. landscaper22

    landscaper22 LawnSite Senior Member
    Posts: 829

    Just complete the job for the price in the contract and know that you have lived and learned. I would politely talk to the customer one more time. Tell them the prices of the materials went up and you figured the contract price before your purchased the supplies at the higher price. They have to know that everything is going up a significant amount very quickly.
    Another option (This is not good advice though)...If the customer has paid you half of the money and you have completed at least half of the job, you could tell the customer that you will be losing money if you continue to work and you are not completing any more work. Tell them you regret the error, but materials and all other goods increase in price without warning. And the amount was so significant that you can't complete the job and lose any more money.
    If you have completed a portion of the job that is equal to the amount they have paid then they may not get too angry. If you walk, they will have to find someone else to complete the task, and they know they will have to pay a new contractor more money, so they may try to negotiate with you. BUT, this could really hurt your name. I don't think I would do this. I would have to be in your shoes to fully get a feel for the situation. And they may still try to sue you because you did have a contract. It is dirty of them to not work with you when they can clearly see what has happened. They are preying on you for making a mistake.
  8. ODwyerPW

    ODwyerPW LawnSite Member
    Posts: 72

    eat the job.

    you can't claim to have integrity, then take the home owners money and leave the job incomplete.

    eat the job.
  9. VBsnow

    VBsnow LawnSite Member
    Posts: 241

    Did you all already purchase all of the materials? Where is that money? As long as the materials are on site then finish the job. If the sub will not comply then YOU finish it and sue him. It sucks but the only cost in your own labor is water, effort, and a sandwich.
  10. littleredwagon

    littleredwagon LawnSite Member
    Posts: 18

    there's the problem right there, the sub has yet to buy everything because of the recent increase in pricing around here. everything literally doubled. he's sold off a few of his belongings, and I've already dipped $3,000 into this project out of my own money. There's still a lot of rebar, concrete, pumping, and a prefab staircase to buy...

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