Law school 101, do we have an agreement? Is the contract in writing? What are the terms of the agreement? Do we have a meeting of the minds between the parties? All important questions, and every contract dispute often comes down to these questions. Any contract for $500.00 or more should be put in writing. I can’t tell you how many small contractors that are painters, plumbers and electricians do not use contracts or service agreements as a part of their business. These small business owners are only setting themselves up for lost revenue and business.
Two parties had an oral contract in 2010 for some home renovation work on a home. Golden, contractor, performed the work and Velasquez, homeowner, owned the home. Golden sued the homeowner for breach of contract and quantum merit. The homeowner agreed to pay $300 a month for the renovation work until the debt was satisfied. The homeowner testified at trial that she agreed the work renovations would not cost more than $20,000.00. The contractor, Golden, testified that the total amount of the work was $23,531 plus $8,219 interest for not paying as agreed to under the terms of the oral agreement.
In 2013, the homeowner inherited some money and tried to resolve the contract dispute with the contractor. The homeowner offered the contractor $9,450.00. The contractor refused payment and filed a lawsuit. At the trial the contractor admitted the two never discussed interest related to the contract. The case was submitted to a jury and the jury ruled in favor of the homeowner. The contractor appealed the verdict and lost.
So, here are some rules to think about in contract disputes. First, for a breach of contract claims, one must prove a valid, binding contract. The contractor must prove performance under the contract and the homeowner did not perform as to the contract requirements and resulting damage.
The rule of thumb, if you are a contractor, develop a written contract. If you are a contractor, make sure you list what work will be included in the agreement and if there will be any interest for non-payment of services.
If you are in a contract or business dispute, contract Ingram Law LLC. We represent many small businesses every day. Contact us at (205) 335-2640.