Any contractors out there ever not sign a contract?

[getyourbone]

So, am I the only idiot that agrees to take on a $65,000 insurance claim project based on a handshake?  I am feeling pretty stupid right now as I try to collect the balance due (approx 15,000) from the homeowner.
 

Live and learn!

 

[BarryL]

Ouch!  I hate to say this...but it sounds like you..."gotyourbone"

That name you have there is killing me....I don't know how many times a day I must say that...

5 huskies.....get your bone!  Gooood boyyyyy!

So it sounds like they have refused to pay?  If so, what are you doing about it?

 

[getyourbone]

I am fairly new to the contracting world.  a little too green, a little too enthusiastic, and not quite organized enough.  I should have documented every call I made with the date, reason, outcome.

The homeowners brought me on because they were selling their home and didn't have time to try and manage the project and get ready to move.  The claim entailed roof,siding,windows,doors, and refinishing of deck.  long story short,  I made sure everything that could be completed before closing was done, escrowed the balance for the new homeowners protection, provided lien waivers so the old homeowners could sell the house and agreed to wait to get paid an unknown balance at the end when the final numbers came in as to what the insurance company would be willing to pay.  Well, the final numbers are in and now they do not want to pay the remaining funds with little to no reason other than they say they don't trust me.

At this point there is nothing to trust or not trust.  The work has been completed, the new home owners are very happy.  the old home owners were given lien waivers months ago(Aug 2008).  I put up with 2 of the progress payments bouncing(one of which caused by account be be closed by the bank),

Maybe the reason they don't trust me is because no intelligent person would agree to put themselves in such a situation.  I AM guilty of that but certainly not inferior work or effort in making sure the project moved along.

Yup my dog loves to get his bone.  In fact the snow has melted in the backyard and he was so excited to have found his long lost bone from last fall.

 

[BarryL]

I am sorry to hear how that turned out for you.  Yes, as you stated...lesson learned.  It is just too bad that the lesson had to be an expensive one.  It is unfortunate that there are those that would justify doing such a thing.  It does not make sense that they would use that they don't trust you??  As you have said, the work is done.  What's not to trust?  I would consider legal action considering the amount.

It is funny how they keep "resurrecting" bones....mine do that all the time...sometimes I swear they are multiplying!

 

[woodshopdemos]

So, am I the only idiot that agrees to take on a $65,000 insurance claim project based on a handshake?  I am feeling pretty stupid right now as I try to collect the balance due (approx 15,000) from the homeowner.
   

Live and learn!

Ouch!!! I would think your best "contract" is the fact that they paid you $50,000 already.Those payments I assume were paid against an invoice. Hopefuly the invooice woudl say "frst payment etc"
  While not a contrctor, I was "stiffed" for $14,000 in 1980 by the company (J&J) had to "get started fast"and I did that and delievered in record time and went to bill only to find another company had been contracted  by another group but same project. Two years later they settled. Not worth the pain and anquish. Now I have contract signed before any work.

 

[nickao]

You do not give the lien waivers unless you have all the payments. You just released your lien basically saying you have been paid in full. No matter what the contract would say even if you had one, if you give them the lien waiver you just make it a whole lot harder on yourself. The clients are just going to come back and say we paid in full otherwise why did the contractor sign the waiver. To many judges that is going to be the end of it unless there are other documents regarding a balance due upon closing, possession by the new owner, etc.

I know a General I used to work with would give me the old "sign the waiver so I can get paid and then I can pay you", but if I did that I would be saying I was paid when I was not and then hope the general actually paid me. I always said no to that and guess what, the general paid me first because he wanted that big check from the client.

I am so glad I am out of that game. My projects are smaller so I can  get 100% up front or I do not do the job.

 

[Warrior]

I rarely use a contract. I usually work on site for T and M for 65-75 per hour. On bid woodworking jobs I get 50 - 75% up front and the remainder at delivery.

 

[kdzito]

All of you are lucky as I work on Monthly Construction Draws in the Commercial Construction Industry as a Subcontractor; however, my contracts are up to $8.5 million and usually have to put up a payment and performance bond.  My company's neck always has to go way out there; however, the rewards can be great.

It's really hard when the owner does changes and this is where the proof is to get paid and it always takes months when this happens.

Well I guess I do have job security.

 

[kdzito]

You do not give the lien waivers unless you have all the payments. You just released your lien basically saying you have been paid in full. No matter what the contract would say even if you had one, if you give them the lien waiver you just make it a whole lot harder on yourself. The clients are just going to come back and say we paid in full otherwise why did the contractor sign the waiver. To many judges that is going to be the end of it unless there are other documents regarding a balance due upon closing, possession by the new owner, etc.

I know a General I used to work with would give me the old "sign the waiver so I can get paid and then I can pay you", but if I did that I would be saying I was paid when I was not and then hope the general actually paid me. I always said no to that and guess what, the general paid me first because he wanted that big check from the client.

I am so glad I am out of that game. My projects are smaller so I can  get 100% up front or I do not do the job.

We use a contingent waiver and it's based on the contract amount of the monthly draw.

 

[ForumMFG]

I took a class on "'The legal side of project management".  It was presented by a Lawyer who specializes in contracts and who was also a contractor himself prior to becoming a Lawyer. 

If there was only on thing i learned and got out of the class it would be "Never proceed with work without something signed".  He pounded this into our heads.

If you ever took someone to court for this and you didn't have a contract signed, the first thing the judge is going to say is "where is it in writing?".

If it's not in writing then it never happened, so you need to make sure you do this and do it the right way.  Your protecting yourself by doing this.

Now where I work, I will sometimes proceed with work If I know the customer and they have a good track record or if the project is extremely small.  Sometimes it takes a long time to make up a contract because of all the bullcrap that goes on.

For everyone that does contract work:  Draw up those contracts and get them signed before you do anywork!!

I am actually very knowledgeable in this area so feel free to ask any qyestions.

-Dave

 

[Holzhacker]

I did lots of jobs without contracts in the past. Sometimes it worked out sometimes not. I will work for past clients with good track records without a contract on smaller stuff. New clients or larger projects, always have a contract. Anything Corp or Ins company always have a contract. Never give a lien waiver without getting payment. "We have to have it for the closing". Fine I'll be at the closing, when the title company issues me a check as part of the closing I will hand over the lien waiver, Thank you.
15K is a lot of dough, I would think about going after it. I generally write off up to a few thousand, takes more time and money to collect than you will get back. I did recently go after a guy for $2110.00 just because he was such a piece of #### about it.
You are going to be dealing with an INS company, already signed waivers, house has transferred ownership, that's a tough one. Mechanics Lien is probably not an option. Do you have an Attorney friend? Talk with a lawyer for options. Just because they refuse to pay doesn't mean they won't have to. Wearing you down is part of the game for them. Consider putting together an accounting of the project so all expenses and payments are itemized, what payments from the client paid for what portion of the job, etc. That way you can show the balance is justified. Since they can't provide proof of payment related to the lien waiver's that might help. Ask your attorney about 'specific performance'.

 

[gkeas]

I am not a construction contractor, but I do work in the general field (audio/video installation).  I don't do formal contracts, but rather an estimate with a sign off page (some times).  Usually, I get the green light, take a deposit for the equipment cost, and collect a final invoice for the balance (labor).  That typically breaks down between 20-35% of the total project. 

I guess I've been very fortunate thus far, as I've only been stiffed for $2300 in 4 years.  That was an unusual circumstance as I had done several projects for this client in the past, but when I tried to collect for this "service" call, I found out that the couple had divorced and sold the house (their check bounced and then they avoided me for a few months, but they were good clients, and I had no reason to think I'd get hosed). 

Even with that, I still prefer to do business on a handshake, rather than 20+ pages of legal garb that will yield no better results when it comes time to collect.