Legal Question in Construction Law in California

I am a general contractor and have recently entered into a labor only contract. Unfortunatly I ended up having to manage the whole project as well as get materials taking up hours of my time needed for labor. In addition the client purchased wrong materials that had to be taken back by me and when they were right they were delivered late. As a result I have been loosing money on this job that I had bidd low since I was only charging for labor. Now the job needs about two more weeks over its estimated time of completion and there is no more money left in the contract to pay for me and my crews hours. My question to you is would I be with in my rights to ask for more money or just walk off of the job.


Asked on 5/29/10, 11:49 am

2 Answers from Attorneys

It depends on how well documented and proveable your additional expenses are. Unfortunately it sounds like you have fallen into the trap that many contractors fall into: not getting up front change orders when the scope of work changes. Many contractors are reluctant to say, "that's not in my contract" when the owner asks for a little change here and a little extra work there and a little more time consuming other thing. Then when it all adds up you're talking real money and they wind up in a fight with the owner who never expected any extra charges. All you can do now is document carefully and objectively all your extra costs, and then sit down with the owner and lay it out for them. Then ask for a contract modification to cover them. Having not done the work on the front end to get these costs covered, you probably need to expect to barely break even at best, and probably lose some money on the job, but if you can get enough to not take a total bath, and thereby avoid getting sued by the owner who will surely sue you if you walk off the job, it's probably worth it.

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Answered on 5/29/10, 4:38 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I agree with the previous answer. You'd certainly be within your rights to ask for more money, and perhaps even to demand it based upon oral or implied requests by the owner for services not covered by the contract, or for correcting errors made by the owner. I think negotiation is more appropriate at this stage than walking off the job, or filing suit, or even remaining silent and enduring the losses.

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Answered on 5/30/10, 12:45 pm


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