Legal Question in Construction Law in California
Contractor charges Owner 40% more than sub-contract amount
I signed a contract with a licensed general contractor for an addition to my house. The agreement included a ''projected budget'' of ''estimated sub contract costs''. The amount listed for stucco was $22,887.00 and these were supposed to be based on actual subcontractor bids. During stucco installation, I asked the subcontractor his contract amount and was told $14,000.00. Apparently, the general shopped around and found a much lower priced (and unlicensed) sub, but is insisting on charging me the original $22,887.00. Is this ethical? Am I obligated to pay the original amount since I ''agreed'' to it or can I argue that I should pay the new lower amount only (with maybe a small percentage add)? I am planning on small claims court, since the contractor will not budge on his position. What are my chances? Who is right? Thanks for your help.
2 Answers from Attorneys
Re: Contractor charges Owner 40% more than sub-contract amount
Email me with a number where I can contact you. I worked as a general contractor for years before becoming an attorney. [email protected]
Re: Contractor charges Owner 40% more than sub-contract amount
It's very difficult to interpret contracts without reviewing the contract. Nevertheless, the part that I would zero in on is that the contractor has asked an unlicensed subcontractor to do the work. You should absolutely refuse to allow any unlicensed subcontractors on your property. If the contractor wants these people to do the job, then they must become employees of the contractor. He must assure you that they are on his payroll and are covered by the contractor's worker's compensation policy. It is illegal for the contractor to contract with unlicensed subcontractors. If he insists on doing this, I would file a complaint with the Contractors State License Board.
Beyond this, a general principle of contract law is that once you sign a contract for a certain amount, you can't later back out because you have since come to the conclusion that the price is too high. But, as you can see above, this isn't always the end to the inquiry. There are a number of other reasons why a contract may not be binding, but this can get quite involved and complicated.
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