AboutPeter M. Elliott Expertise First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only.
Experience Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit.
George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')
Question -------------------------
Followup To
Question -
Hello,
I had a non-verbal contract with a contractor. The amount to be paid for the task was $5,400 and it was disclosed (numerous times) to the contractor that his quote needed to remain a fixed quote. I was constantly told, through the process, that I would be "taken care of."
Towards the end, the job has not been complete, and I have paid the contracter over $8,000. He had asked me, in the past, to pay his employees directly so he would not have to deal with the tax issues. One of the employees had waited for two months to cash the check and the account was closed out (credit card, and did a balance transfer). I did not realize the check was outstanding.
The employee is threatening to sue me. My impression would be that he needs to go to his employer for the money, and the employer can then decide to sue me. My impression is, also, that they did not complete the job and I have already paid more then what was quoted (there is one witness to hearing the quote).
Do they have plausible legal recourse? Can this person take me to small claims court & win? If it is an empty threat then it is, if he is going to take me to court then I would like to sue the contractor for breach of a verbal contract. My next question would be - do I have a viable option?
Thank you.
Answer -
Hi Avi,
Verbal or non-verbal, a contract is a contract is a contract. Problems arise when the parties fall out and there is no written evidence of the basis of the Contract. Then you have to persuade the judge as to who is correct; problematic and expensive at the best of times. Several aspects of this question appear inconsistent or unusual. Why did you pay employees direct? The comments about tax suggest that someone did not want to be honest with the IRS. If the price is a fixed lump sum, why pay more? Why not put the minimum facts in writing at an early stage of the discussions?
The employee could sue you either in the small claims court or through the procedure known as mechanic's lien. At the very least you issued a cheque, which implies a financial obligation, and did not honour that cheque. I suggest that you study the procedure for applying a mechanic's lien to the property. There are many excellent websites (keywords 'mechanic's lien' on www.google.com or other search engine), both federal and commercial, which will explain the procedure from the view of the Contractor and the homeowner, so that you can see the possible defences and ensure that you make no errors to negate your efforts to defend the case.
Your argument is with the Contractor, not the employee. Thus you might wish to consider employing another contractor to complete the work and suing the first Contractor for breach of contract to recover any extra costs. It will all get very messy and there will be tears. Try to find the solution with the minimum cost and write off the extra expense against experience.
I hope that the above has helped, but feel free to ask a supplementary question if I have misunderstood anything.
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Hello and thank you.
The reason I paid the employees direct was because their boss did not want to have to deal with taxes. I wanted initially to pay a lump sum, but the contractor said he would bill me as the work might get spread out over a few weeks due to other obligations and did not feel it was fair to take the money from me when all the work was not completed (this made me feel that he was honorable). I continued to pay, and complain, because the way he issued his bills to me were in small increments, so it was edging up to 5400, got really close (about 5000), then he slammed me with a large bill. In retrospect I should have told him to wait a few days before paying him, but it was a lot of pressure and a lot of inexperience on my part.
In court can I tell the judge that the contractors employee needs to go to the contractor to collect the payment and not me. After all, I am not his employer? Also can he take me to court in another township even though we have never met outside of Philadelphia, nor was anything mailed outside of Philadelphia (everything was done out of my home).
Thank you,
Avi
Answer Hi Avi,
You have been naive, if not foolish. Any boss deals with taxes as a matter of course. I warn again about the IRS.
Please research the web sites dealing with mechanic's lien, as a matter of urgency. You CAN be sued by an employee, or subcontractor, and you cannot refuse to pay, even if you have paid the main contractor. The worst case scenario is that your home is taken and sold to pay the outstanding amount. You have been warned!
I suggest most strongly that you start an action for breach of contract and recovery of extra costs against the builder, but the decision is yours.
