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.

 

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...

 

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.

 

Some lessons are expensive. Lawyers only increase the expense.

 

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

 

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.

 

eat the job.

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

eat the job.

 

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.

 

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...

 

I had a Job Last year I lost about $3000.00 On and then when we were done he didn't pay his last bill for $2000.00 So I lost about 5grand.... I should have gone after him but he "was" a friend and the whole thing was just a mess I just wanted to get done and leave ....

 

yuck, that sounds like exactly where i'm at. i'm working towards getting this finished, but i only have a limited amount of money left! The problem with being young, and no real nest egg I suppose. But oh well, I'm toughing it out and hoping for the best...*trucewhiteflag*

 

It sounds like you seriously underestimated the cost of this project. Depending on the verbiage used on your contract, you may have your customer pay for the needed material but it is unlikely he would readily agree to that. Your best bet may be to have a sit down with your customer and show him where his money went (bring all your invoices). Explain your customer that you are doing everything you can to do the job right for him but he will have to pay for the increase in material cost (which is not in your control and could not be predicted at the time of the estimate). Your second step would be to stop the project until you come to an agreement with your customer. There should be a provision in your contract for things beyond your control (weather, civil war, etc...), unpredictable material cost increase is one of them (if it really was unpredictable that is...).
Make your customer understand that it is to the benefice of all parties to come to an amicable solution here...

 

This is strictly an observation and not meant to offend. I think you asked for it. You should have either written in something to accomodate the increased cost of materials if and when it could occur, or operated at cost plus. You underbid the job. You may want to take out a loan or go into hiding. This is a huge mistake and I believe you should be paying for it.

BTW, when did concrete double? Rebar should have been bought after receiving the money. It is a commodity as it is metal.

Sorry.

Anyone else have a take on it?

 

Another quick note here:
Put a clause on all your contracts that estimates are given for material cost at the time of the estimate, any increase in material cost will be at the customer charge....

 

OK...if nobody else will ask it...How much did the material go up? It sounds like you just flat out bid too low and now want to walk away. Put yourself in the customer's shoes. How would you feel?

 

man, a lot of you are just straight bitter, and that's okay i suppose. but no need to get panties in a bunch here, you're not involved, i'm asking for advice, not angry opinions. thank you to those of you with constructive criticism, I appreciate that, but for those of you with just criticism, with nothing useful to say, please go find another topic to be angry at.

I'm doing all I can to accomodate the customer, including dumping my own money into things. I DID NOT MAKE THE BID, MY SUBCONTRACTOR DID. this is where the problem came from. Problem with taking a friend under my wing, yet still letting him operate like it's his company. I know, that was my mistake, but that is no longer the issue, instead it's the mistake I am currently dealing with.

The issue, is finding ways to make this the least painful. I'm finishing the job, I'm dumping my own money in, I'm not running away, so stop saying things like that.

Thank you again to everyone that is helping... Please keep the constructive critiques coming in...

 

Material went up by nearly 3/4 the cost. The concrete did, the rebar did. etc. I have bills from all of the suppliers, showing the costs. I've let the customer know this.

I just wish there were a way to make this executive of a fortune 500 company , and no i'm not even joking, aid in the process of subsidizing just straight material cost. I'm not asking for labor, obviously, we've been doing that for free for 2 weeks now.

I don't EXPECT him too, but here's to wishful thinking. Obviously I'm not making demands of him, I'm not being unreasonable... I'm doing what I'm doing, which is continuing, but looking for an option that isn't puting me so much under the table for one simple mistake...

 

You should find a job until you learn how to operate a business. You came on here asking for the answer when you already know it. What did you expect? Someone was going to mail you some re-bar or tell you of mickey mouse's secret potion to make concrete appear.

It pisses people off when some one claims to take responsibility in one sentence and then blames another person in the same paragraph.

You bit off more than you can chew and your customer agreed to hire an inexperienced contractor most likely to save money.

In addition, I don't think anyone is buying the fact that the materials doubled. This was pure and simple a screw up on your end.

Bitter or direct, choose your own word. Why are you on the computer? You should be out making money.

 

Talk to your customer and see if he will be willing to pay for materials and finish the job yourself and eat the labor part of it that way he will see that your willing to eat some of the cost maybe he will give in and pay for the materials, good luck, oh and get rid of your sub.

 

Littleredwagon,

You went at it the wrong way from the begining... Never,never,never let a sub price a job write a contract and get work for YOUR company unless you look it over...This will never end in a good way, the reason he is a sub is because he can't get the work himself. ---- that just flat out sucks for you ---

You also said he is a fortune 500 company exec.?... Then he will probably never give you any more money to complete the job.... and he will most likely sue you(not the sub) if the job isn't complete. They always want to stick it to someone who has made a mistake.

I would sit down w/ the sub and let him know that if he still wants to have a working relationship w/ your company, that you 2 need to figure out how to split the debt/work....call in any and all favors you have built up w/ family, friends, and other companies... and try to get a loan for the balance that is left after that... Unfortunately this one could sink your business...

And make sure you change all your contracts to include exlusions for material inflation that you have no control over(I would also add an extra addendum to the contracts specifically for this w/ a seperate signature area for you and the customer, so they cannot possible say "oh he skipped that page when I signed the contract". Your answer would be " If i skipped that page why is your signature on it?"


Basically I see no easy way out.... you are stuck.....that's the ugly, ugly truth.

 

let's stay on topic and refrain from the name calling please.

giving opinions and advice are great, but we do not need to personally attack one another or call each other names because we agree/disagree with another's opinions or advice.

thanks in advance

 

The issue, is finding ways to make this the least painful. I'm finishing the job, I'm dumping my own money in, I'm not running away, so stop saying things like that.

Thank you again to everyone that is helping... Please keep the constructive critiques coming in...

Based on that statement, there is not much you or anyone else can do to ease the pain. You said you are going to finish the job and you are dumping your own money into the project. You also said the customer is not willing to pay you more than what the contract says. There is no way to ease the pain on this one. You can meet with the customer like already mentioned, with all invoices and paperwork in hand, and try one more time to get him to come through with more money just to cover the expenses. Also your sub-contractor does need to eat at least half of the loss. There is not really any other advice we can give.

 

Littlered,

I would try to talk with him one more time as well, but not to ask him to pay more because it sounds like we all know the answer to that. I would ask him if he would agree to let the job take a little longer than expected, sounds like two weeks min. to me considering the amount of work you are talking about. That way at least you can slide in some "filler jobs" to make a little extra coin to help ease the pain a little. Although you would also have to swallow the fact that you will be basically doing those jobs for free as well(to cover your behind).

Too bad you just didn't get one of those very rare customers that understand how everything works from the top all the way down to the "little guy" and is willing to help you figure out a bad situation, and at least split the problem w/you. These customers are very,very rare.

 

........I would also agree that your subcontracter needs to eat half the loss.....He needs to be held accountable for the situation as well....if for nothing else so he can learn how NOT to get into such a mess.
(Not saying that I haven't been there, because trust me I have....same situation except I bid job w/ material included and had no clause for rising costs)

 

........I would also agree that your subcontracter needs to eat half the loss.....He needs to be held accountable for the situation as well....if for nothing else so he can learn how NOT to get into such a mess.
(Not saying that I haven't been there, because trust me I have....same situation except I bid job w/ material included and had no clause for rising costs)

In all honesty, the sub is only responsible for the job he agreed to do for you. The reason a company (or person in this situation) is subbed out is because they can't get the work theirself, and they don't usually have all the insurances and bonds to get the work in the first place. When I sub I am agreeing to the customer that I will make sure the job is done for what the contract says....period. There are no other factors involved. At the point the contract was signed, your company was responsible for the job no matter what your sub does. Subs are actually of no concern to the customer, thats why they hire us, cause they can't find all the people it takes to do the jobs. Every job that I do, I realize that I am responsible, and that I am in a position to get sued, or lose money on any job I start. Bite the bullet and lose..hell $10000 if you have too, cause it will save you alot in the long run. If you are sued your insurance or bonds will take care of you (hopefully if your legal), but don't count on being able to afford any afterwards. All your premiums will go through the roof. Either way your screwed, you just have to look at your situation, and figure out whats best for you. My dad hired a contractor to remodel his house and he did the same thing to my dad. Said he would do this job for this money. He hemhalled around getting started and materials did go up. He got halfway finished and quit!! I am on both sides of the fence here. My dad refinanced his house for $40000 just to do the remodel. His family has moved out to his sisters house for the 2 week remodel that is going on 5 weeks now. In my eyes, Daniel should be out there helping with the work if he can't afford to pay his workers to. My dad has to get off work and do the work on his house hisself everyday because he can't refi again to hire another contractor to finish the job the other got paid for!! He is not going to sue because he is a nice guy, but the contractor will never have a job in our area again....my family will make sure of that! My brother found out what the contractor did, and went to his house and beat him down mafia style (put him in the hospital actually). Big reason he was pissed off was that 2 days after my dad went ahead and payed the second half of the $40000 so he could finish up....he quit. Went to the dealership and bought a new truck while saying he doesn't have any money to pay his workers to finish!! He also said he bought all the materials and they were at the lumber yard, when dad went to pick up they didn't know what he was talking about!! While I don't condone that behavior, I kinda felt like my bro when I heard what happened, kinda wanted to do something about it....lol. My bro is crazy though!! The big issue was we talked dad into hiring him because we grew up with the contractor in school, and wanted to see him get the job and keep being succesful.