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 I am at odds with our building contractor on a commercial project. We received a renovation qoute of $350,000. After our contractor walked off the job and the rest of his subs were paid to 1) finish and 2) keep liens off the property the total costs have come to $535,000, with even more outstanding. He has been compensated $41,000 of the $60,000 as laid out in the contract. I informed him that no more money would be paid to anyone for this work. He then sued claiming that since I have paid the balance to the subs, that I am now the principle contractor and he has lost and compensation because of it. Who is generally liable for cost overages and what are some possible remedies in this case? Naturally I will counter sue for the full amount.
Answer Hi Bill,
You do not say where you are working nor what form of contract is applicable, so the following remarks, as always, will be general in nature. It sounds as if there is a little emotion entering this dispute. Keep your responses in writing and objective or you will lose whatever chance you have of a settlement.
There are several factors which affect any answer to your question:
1. Was the contract fixed price or remeasurable?
2. Did you or your representative order more work?
3. Was there a clause which allowed you to terminate the contract with the contractor?
4. Did you terminate the contract with the contractor for cause in a formal, written manner?
5. Did the contractor formally terminate the contract?
6. Was the contractor in breach of contract by leaving the work?
Renovation contracts are more likely to have cost overruns greenfield projects. There is higher risk due to the uncertainty of hidden problems, especially if there are no original drawings and the buildings are old. Standards have changed or been issued. For example door and window sizes may be different, so new units have to be made to size or the openings revised.
If a project is delayed or increased and then the contract is cancelled, the contractor may have the right to claim for overheads and loss of profit, depending on the particular form of contract. Some forms of contract prohibit cancellation of the contract, merely to allow another contractor to finish the project.
Of course you can counter sue for the 'full amount', but what is the 'full amount'? If you sue and win, will you get paid? In any case, your lawyer will get paid and then you will be even poorer. As always, I recommend mediation rather than legal action.
If you wish to return with a follow up question, then please give me more detailed and specific information.
