Legal Question in Business Law in Indiana

I am a general contractor in Indiana . For the past two years I have worked on property doing repairs for a condominium association . The first year the dollar amount was low . Under $3000.00 the second year was valued above $45,000.00 . This year (2015) I was scheduled to do work above $50,000.00. All the same paperwork was used all three years . This year the president of the association got upset at their yearly association meeting and relinquished his position during the meeting . I had a verbal agreement with him as president of the association to do the repair list . He would sign the documents at his leisure as he had the previous year . I have three full time employees . I turned down other work to do this job . I am now out of work and will have to lay off the employees . The new association board had me sit with them and discuss how the process worked with the previous board and president in the past . This meeting was within a few days of previous presidents resignation

The new board also gave verbal recognition that my company would do the repairs . They asked my start date for repairs and were fine with my response . Days before I was to begin the repairs the board appointed a liason with their management company to be the go between for the associations board and myself as I had requested . The time to begin was pushed hack a week I agreed . I had thinks on my docket that could keep my employees busy a week

I was then asked again by the liason to hold off a second week . I agreed but with big reservations . I told liason I had to get started soon as I was out off work for myself and employees . I was given a emailed , typed approval to get started . I gave a start date to the liason and two days before I was to start I even got emailed signed contracts to begin repairs on the portions the board thought should be first . Then a day before work began I got a phone call from the liason asking me not to start and what's the longest I could . I sent the liason an email telling them I could not wait past Monday the 8 th. I had to start that date or my employees and I were out of work . I got a large response from the management company via email telling me not to begin work at all until after a meeting on the 12th of the month between the association board and management company wheras the management company wants to change how the association is doing this process . The management company told me do not begin the work because a verbal agreementfrom the pprevious board president is no good in Indiana and I wouldn't get paid for the work . The management company also told me to produce to them any signed documents showing authorization to begin any work . Side note : I could produce 3 documents but don't really want to start the work on Monday if yheres a chance of not getting paid . My real question is can I sue the management company and / or the condo association for lack of commitment or breach of verbal contracts ? Remember I turned away other work for myself and employees because we " had the job ". 219-898-5372 . Rich .


Asked on 6/06/15, 6:55 am

1 Answer from Attorneys
J. Norman Stark J. Norman Stark , Attorney, Architect

Dear Contractor:

LEGALLY SPEAKING�...CONSTRUCTION �

ORAL PROMISES VS. WRITTEN AGREEMENTS

By: J. Norman Stark, ATTORNEY, ARCHITECT EMERITUS (Oh) A.I.A., N.C.A.R.B.

Oral agreements and oral representations made during negotiations for an agreement, when later reduced to writing, are unenforceable ! Under the law, when the agreement of the parties is later reduced to writing and such prior verbal agreements and/or representations are not contained in the written agreement, such omitted terms are NOT ENFORCEABLE! The Parol Evidence Rule, a rule of common law in most jurisdictions, excludes such representations made prior to the writing (written agreement) and not contained in such written and signed agreement.

The Ohio Supreme Court has held: �The Parol Evidence Rule was developed centuries ago to protect the integrity of written contracts.� When two parties have made a contract, and have expressed it in a writing to which they have both agreed as the complete and accurate integration of that contact, evidence of prior understandings and negotiations will not be admitted for the purpose of varying or contradicting the writing.

A written agreement is conclusively presumed to represent the entire agreement of the parties. One exception exists; where the entire agreement of the parties has not been reduced to writing. In such case, other terms that were agreed upon may be heard by the Court, provided they do not contradict to any written terms. Another exception exists when fraud is alleged by either party. Also, where verbal agreements also disclose the existence of a mutual mistake, these may be sufficient to deny a valid written contract.

Prudent business practices require that contracts, in writing, be signed, only after fully encompassing all of the terms discussed and agreed upon. By addressing all of the potential future possibilities or �what ifs?�, one may eliminate claims that frequently occur in personal and business transactions. Stated simply, in the words of one English humorist: �Oral agreements aren�t worth the paper they�re not written on.�

***

"WHERE EXPERIENCE COUNTS, COUNT ON MY EXPERIENCE"

J. NORMAN STARK, ATTORNEY

ARCHITECT EMERITUS (Ohio) A.I.A., N.C.A.R.B.

1109 Carnegie Avenue Cleveland, Ohio 44115

(216) 531-5310 x7100 Email: [email protected]

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Answered on 6/06/15, 8:28 am


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