Contract dispute - UPDATED

The Coffee Shop
1

I’m not looking for legal advice, just opinions of people who might have been in similar situations or unbiased third parties.

A while ago, I was contracted to renovate 3 bathrooms in someone’s home. The plumbers I hired made a really glaring error. They did not catch it. I did not catch it. The error came to light towards the end of the project when the bathrooms have been tiled, nearly completed, etc. The fix involved removing drywall in 2 bathrooms, fixing the plumbing, repairing the drywall and paint.

Upon discovery of the mistake, both the plumber and I immediately took responsibility for the error. The plumber agreed to pay the entire cost of the remediation, and reduce his hourly rate for the entire project. I willingly forefited my contractors mark up of the plumbing, and around 4 days of my labour to expedite remediation of the project. The fall out is the project was delayed a week, with no out of pocket expense to the owner.

The client is taking a harder line, and has now withheld a small sun of additional money, around $600, as “penalty” for my negligence, and more importantly, withdrawn his deposit, which I typically hold on to until projects end, from my latest invoice. He wants me to float the remainder of the project myself to ensure he is not left on the hook for any more errors that he worries may occur between now and the projects end. I am worried that he now has way too much leverage over me and do not trust that I will be completely paid at projects end. This could be a significant amount of money.

Both withholding the 600 and deposit are not acceptable resolutions as outlined in our contract, which basically stipulates that I make him whole for the result of my negligence, which I have done.

This all happened a few days before he left on vacation for several weeks. The project is to be completed when he returns. He basically gave me the reduced payment for my invoice, told me I am on notice to finish the job properly or else, and will be paid in full on his return. I worry that this gives him any excuse to not pay me in full for any reason he conjures up. He has already tried to use this error as a way to reduce his total bill for the project.

What I want: to complete the project to our usual high standard, give the client three beautiful new bathrooms, move on and hopefully not burn any bridges. In 10 years of business, I have never had an issue like this, left a client unhappy, or had a contract dispute. Part of me wants to tell him no work will happen until I am paid. But, then he could just withhold my invoice amount, leave the project half done, and turn the situation in to a huge headache.

What I don’t want: to be left out further of pocket for a lot of money, despite fixing the error and completing the project to satisfaction.

I am contacting the firm that drew up my contract this morning.

What would you? Am I being unreasonable? Is he?

Updated at end of thread

2

I’ll answer with my little anecdote.
We had repairs to do in our Florida home before listing it.
The contractor signed the contract stating it would take 10 weeks or less
There was some delay that the contractor estimated to one week because some dry wall needed to be replaced.
So, we thought it would take 11 weeks.

He asked us to sign completion of work before it was complete (we never did of course). Then when he claimed it was
finished, our real estate agent checked and it was poorly finished. So, the contractor had to go back. He messed up a couple
more things that needed fixing.

All in all, it took him 24 weeks. TWENTY FOUR! Never apologized. Never admitted mistakes. Nothing.

So, all that to say, you seem like a very reasonable contractor. Bummer BC is a tad far from Florida :wink:

3

Take a bucket of salt with this and feel free to say “what the hell does he know?”.

It is clear that you value your reputation very highly. If I was you, I would continue to do the work while knowing that you might get screwed. As someone who values their reputation what you don’t want is some idiot making a big internet deal over you stopping work and claiming that you are screwing him.

Next thing you know he’s called some local news show and they are ripping you to shreds in their “Consumers beware” segment.

4

The reality of construction is that sometimes, even the best contractors, make mistakes. I firmly believe it’s how you respond to those mistakes that makes the difference in the eyes of clients. I’ve got no problem owning my role in those mistakes, but, my senses tell me he is looking to take advantage of me/this situation.

5

Take a bucket of salt with this and feel free to say “what the hell does he know?”.

It is clear that you value your reputation very highly. If I was you, I would continue to do the work while knowing that you might get screwed. As someone who values their reputation what you don’t want is some idiot making a big internet deal over you stopping work and claiming that you are screwing him.

Next thing you know he’s called some local news show and they are ripping you to shreds in their “Consumers beware” segment.

If it was a small amount of money, I would do exactly that. But I could be out tens of thousands at the end of this, worst case scenario. Would you still proceed with the work then?

6

Take a bucket of salt with this and feel free to say “what the hell does he know?”.

It is clear that you value your reputation very highly. If I was you, I would continue to do the work while knowing that you might get screwed. As someone who values their reputation what you don’t want is some idiot making a big internet deal over you stopping work and claiming that you are screwing him.

Next thing you know he’s called some local news show and they are ripping you to shreds in their “Consumers beware” segment.

If it was a small amount of money, I would do exactly that. But I could be out tens of thousands at the end of this, worst case scenario. Would you still proceed with the work then?

No, worst case scenario is the guy is a psycho asshole and ruins your reputation and your career.

At least then you can move to somewhere with more reasonable standard of living and start over.

7

Take a bucket of salt with this and feel free to say “what the hell does he know?”.

It is clear that you value your reputation very highly. If I was you, I would continue to do the work while knowing that you might get screwed. As someone who values their reputation what you don’t want is some idiot making a big internet deal over you stopping work and claiming that you are screwing him.

Next thing you know he’s called some local news show and they are ripping you to shreds in their “Consumers beware” segment.

If it was a small amount of money, I would do exactly that. But I could be out tens of thousands at the end of this, worst case scenario. Would you still proceed with the work then?

No, worst case scenario is the guy is a psycho asshole and ruins your reputation and your career.

At least then you can move to somewhere with more reasonable standard of living and start over.

I dont think one bad client could do that. The reality is the fix in this issue was relatively minor. Project delayed a week, and he didn’t pay a dime extra. I’m not sure how you could ruin a career on that. The truth is on my side.

8

The reality of construction is that sometimes, even the best contractors, make mistakes. I firmly believe it’s how you respond to those mistakes that makes the difference in the eyes of clients. I’ve got no problem owning my role in those mistakes, but, my senses tell me he is looking to take advantage of me/this situation.

Indeed. In our case, they just reprioritize our stuff to the bottom of the list because we weren’t there on their backs. But apologizing for the errors would have gone a long way.

9

If I read your story right you have fixed the problem at no additional cost to the client. There is no indication if the entire schedule has slipped but it does not sound like any significant delay happened.
You have a contract. I can’t imagine you have something in there that he can withhold payment because you may make a mistake that you fix. Same with the deposit.

I would be be issuing him a letter indicating he has not paid the latest invoice in full and is in violation of the contract. You can’t arbitrary change the payment conditions like that.
If I though this relationship was going to hell I would also indicate that if it is not corrected by a certain date you will demobilize and suspend work. Demobilizing will carry an additional fee of $XXX, and will only happen after past invoices are paid.

10

You have his deposit yet he took it back?

11

Take a bucket of salt with this and feel free to say “what the hell does he know?”.

It is clear that you value your reputation very highly. If I was you, I would continue to do the work while knowing that you might get screwed. As someone who values their reputation what you don’t want is some idiot making a big internet deal over you stopping work and claiming that you are screwing him.

Next thing you know he’s called some local news show and they are ripping you to shreds in their “Consumers beware” segment.

If it was a small amount of money, I would do exactly that. But I could be out tens of thousands at the end of this, worst case scenario. Would you still proceed with the work then?

No, worst case scenario is the guy is a psycho asshole and ruins your reputation and your career.

At least then you can move to somewhere with more reasonable standard of living and start over.

He thankfully lives in Canada where he could actually leverage the insane libel laws to his benefit.

12

You have his deposit yet he took it back?

Before the job started I took a deposit. I hold this deposit until the end of the job and credit it back on the last invoice. This ensures I am not financing entirely their renovation with my money.

So, on this interm invoice, he paid me minus his arbitrary penalty, and the amount of the deposit.

13

You have his deposit yet he took it back?

Before the job started I took a deposit. I hold this deposit until the end of the job and credit it back on the last invoice. This ensures I am not financing entirely their renovation with my money.

So, on this interm invoice, he paid me minus his arbitrary penalty, and the amount of the deposit.

So how much are you out of pocket if you just walked away today? 600 bucks?

14

Take a bucket of salt with this and feel free to say “what the hell does he know?”.

It is clear that you value your reputation very highly. If I was you, I would continue to do the work while knowing that you might get screwed. As someone who values their reputation what you don’t want is some idiot making a big internet deal over you stopping work and claiming that you are screwing him.

Next thing you know he’s called some local news show and they are ripping you to shreds in their “Consumers beware” segment.

If it was a small amount of money, I would do exactly that. But I could be out tens of thousands at the end of this, worst case scenario. Would you still proceed with the work then?

No, worst case scenario is the guy is a psycho asshole and ruins your reputation and your career.

At least then you can move to somewhere with more reasonable standard of living and start over.

He thankfully lives in Canada where he could actually leverage the insane libel laws to his benefit.

Long live the Queen of Tuvalu

15

The reality of construction is that sometimes, even the best contractors, make mistakes. I firmly believe it’s how you respond to those mistakes that makes the difference in the eyes of clients. I’ve got no problem owning my role in those mistakes, but, my senses tell me he is looking to take advantage of me/this situation.

Every single time I got the feeling a client was going to try to screw me on the bill I was right. I would proceed assuming that is the case and try to take precautions.

I don’t know that I would try to stop working partway through either though. That would guarantee a really irate client.

Is there any hope of a sit down with the client to explain why there still has to be a deposit and why a ‘fine’ is not appropriate given that the mistake was already fixed? Or has that shipped sailed?

16

You have his deposit yet he took it back?

Before the job started I took a deposit. I hold this deposit until the end of the job and credit it back on the last invoice. This ensures I am not financing entirely their renovation with my money.

So, on this interm invoice, he paid me minus his arbitrary penalty, and the amount of the deposit.

So how much are you out of pocket if you just walked away today? 600 bucks?

11k. Plus the stain on my reputation. Also, this project was forwarded to my via a well known and high end designer. I do not want to burn that particular bridge.

17

The reality of construction is that sometimes, even the best contractors, make mistakes. I firmly believe it’s how you respond to those mistakes that makes the difference in the eyes of clients. I’ve got no problem owning my role in those mistakes, but, my senses tell me he is looking to take advantage of me/this situation.

Every single time I got the feeling a client was going to try to screw me on the bill I was right. I would proceed assuming that is the case and try to take precautions.

I don’t know that I would try to stop working partway through either though. That would guarantee a really irate client.

Is there any hope of a sit down with the client to explain why there still has to be a deposit and why a ‘fine’ is not appropriate given that the mistake was already fixed? Or has that shipped sailed?

He is already gone on vacation. He has left the check. I want to reply to his latest email, outlying this understanding that ‘we’ (he) has reached saying that, I have accepted his check in the interm in the interest of moving the project forward, but, do not accept his resolution and to outline it is in violation of our contract. Basically, work will continue until he gets back, but this ain’t over. I just want to speak with my lawyer first.

18

In the states you could put a lean on his home. I would have my attorneys look into that.

19

You have his deposit yet he took it back?

Before the job started I took a deposit. I hold this deposit until the end of the job and credit it back on the last invoice. This ensures I am not financing entirely their renovation with my money.

So, on this interm invoice, he paid me minus his arbitrary penalty, and the amount of the deposit.

So how much are you out of pocket if you just walked away today? 600 bucks?

11k. Plus the stain on my reputation. Also, this project was forwarded to my via a well known and high end designer. I do not want to burn that particular bridge.

Tough situation. This guy sounds like an asshole who was probably pissed at the redo.

I’d tell him he can hold the 600 but he has to pay the full invoice

20

I can and will do that if needed, but, that won’t put money in my pocket for a very long time.