Legal Question in Business Law in California

Construction Contract Issue
Long story short, I hired a general contractor to remodel my house. This guy was a friend and charismatic business associate, he had managed the project for me earlier, and I had fulfilled my part of _that_ contract. When I signed on with him for construction, I foolishly paid him over $20K he claimed (verbally and in writing) that was for work previously done, i.e., project management. The $ figure is written into the construction contract. I rescinded the contract within the four-day period, and I want my $20K-plus back. He will not refund it. We're on the outs, he's defrauded others to at least $125K on one project alone, and I'm so glad I found out early he is not trustworthy. It's more complicated than this, but that's enough.
Is the $20K+ refundable because it was written into the construction contract, or not, because he claims it's for prior work? (It happens to be ten percent of the value of the project to date. Again, i satisfied the project management contract in full.)

Asked on 9/13/08, 6:41 pm

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

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Re: Construction Contract Issue

There are no legal magic bullets or wonder drugs to cure a situation like this. At this point, you'll need to consider litigation for breach of contract and perhaps fraud.

The starting point is to review your contract to see what provisions it has for rescission and breach, such as an arbitration clause or attorney-fee clause. The presence or absence of either will bear on your strategy. I would also do an on-line check of his license status with the Contractors State License Board at www.cslb.ca.gov and write down or print out all particulars including the identity of his bonding company.

It is also strategically important to think about where the money would come from to pay a judgment or arbitration award, if you got one. The contractors' bond is probably insufficient to pay the claim itself, and would not cover an award of fees.

Answered on 9/14/08, 4:34 pm

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