Legal Question in Construction Law in New Jersey
customer cancelled contract
We were referred to a customer by a realtor friend to powerwash and paint the exterior of their home to help with the sale. The proposal was sent to the realtor (in his name) who gave the pricing to the customer. Customer accepted the pricing, gave us a little more then the required 1/3 deposit (a check written out to CASH). Job was scheduled and power wash done as soon as the deposit was given, painting was delayed due to rainy weather. Five days later when weather cleared, showed up at the house. No one is home, called customer, said they were cancelling-the house went under contract the day before-didn't the realtor call us and could they have their deposit back? We were never told that the contract would be cancelled if the house sold, in fact, we were told the house would NOT be shown until the painting was finished. Are we required to return her deposit? We felt it was a moral issue so we offered the customer a credit toward painting at her new place good for one year, but she is threatening to take us to small claims court.
2 Answers from Attorneys
Re: customer cancelled contract
I have briefly reviewed the other attorney's reply to you.
I am in northern New Jersey, and you are not nearby, so please understand that my advice is simply to assist you:
YOU DESPERATELY NEED AN ATTORNEY WHO WILL ADVISE AND GUIDE YOU. Someone who you can turn to when you have problems, like now. And, you should also have the attorney look at the contract forms you are using to make sure that they are complete and will be enforced by the Courts. Right now, you are at risk for troubles. Get a lawyer. It really is worth the money. Find an attorney who is experienced in advising small businesses. Ask the attorney how many small businesses he/she is advising now, and for how many years.
Please find and hire an attorney. Good luck to you.
Re: customer cancelled contract
On the facts as you describe them, you are entitled to contract damages since the other party breached the contract. Simply stated, contract damages are what is necessary to put you in the same position as you would have been if the other party had not cancelled the contract. So, you are entitled to the profit that you would have made on the entire job plus the costs that you incurred for the work that you actually did. If this is more than the deposit, you are entitled to get the difference. Technically, if the deposit is more, you should give back the difference.
Your situation points out the wisdom of getting a deposit in the first place. Among other things, it should be large enough to keep you from getting hurt too seriously if the customer breaches.
If you are sued for the deposit, you should counterclaim. You probably have a claim that exceeds the deposit amount.
There is another very important right that you may have. If you can show that you actually lost money on the job, there is the possibility that you can file a construction lien on the property. This would get your money, but it must be carefully done so as not to overstate your claim. That is because the lien will tie up money when the property is sold. You need to be sure that you can justify the amount that you claim otherwise you may be liable for damages to the other party.
A lot of the details would depend on the specifics of the case. By first profession, I am and engineer and, because of that, I seek out cases in the construction industry. My contact information is below. Call or email if I can help further.
By the way, you should also have and use a written contract whenever you do work. A well-drafted contract will help to keep you out of court and in business.
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