construction contract laws
 

Hi, would anyone know anything about this subject, a company is trying to stiff me.
Mark

Re: construction contract laws
 

More details are required, then we may be able to assist.

Re: construction contract laws
 

Hi,
I have a steel erecting company and 2 months ago I invoiced the fabricators for the final payment, $9000 + hst. Ample extra work has been done on this site totalling $18,000 but the fabricator supplied me a lift at the cost of $8,000.This means the fabricator owes me $9,000 for contract plus $10,000 for extras. He tells me he is not willing to pay the extras but says he has taken his charge off the contract therefore his $8,000 cancels out my $9,000 for contract. Surely it must not be within the law to deduct money from a contract.
Mark

Re: construction contract laws
 

The question is: does the contract provide for payment of extras? If it does, then the terms of the contract will govern. If it doesn't, then you need to rely upon the doctrine of quantum meriut (providing this is not in Quebec). This doctrine states that you are entitled to a reasonable amount for the work performed.

He is simply attempting to avoid paying you. You have to determine whether you are willing to accept this, or whether you wish to fight for it.

I see litigation ahead if the parties cannot agree upon what is appropriate.

Re: construction contract laws
 

Impossible to advise without reading the terms of the contract.

Looking at your numbers:

Original contract remaining = $9,000
Extras = $9,000 or $10,000 - is this an agreed valuation or your evaluation?
Deduct = $8000 equipment supplied by fabricator - is this an agreed valuation?

My background is managing construction contracts, I'm happy to help if you wish to elaborate further, either here or offline.

Re: construction contract laws
 

Hi,
The contract states that steel erection for job $49,000 + HST, based on drawings E02 to E11.
Any additional work is at cost.
I understand he will not want to pay the full amount for extras, but is it not illegal just to take money off the contract?
He says now because of his deduction the contract is only $40,000 + HST.
I am asking does he have to pay the original contract amount, then I decide is it worth following up the extras( probably not|).The original contract is signed, nothing else.

Thanks Mark

Re: construction contract laws
 

You're not in an ideal place if none of your extras are agreed in writing. Equally, perhaps his extras (provision of the lift) are also not agreed in writing, but he has the chequebook.

Happy to help if you have documentation available for review.

If you don't have documentation, I'd tell him that you don't agree the the cost of the lift unless you can both agree to some of your extras.

How were the extras ordered? Drawing revs, site instructions, emails?

Re: construction contract laws
 

I also spoke with the GC, who advised me to send him all the relevant details and he would then approach the fabricator, and if this could be solved pay me directly and deduct from him if having no money was his issue .He advised me if this cannot be worked out lien the job then he gets nothing, which he will not want.

I'm more concerned about the contract and him deducting money from it. Can he do this or is it illegal.

Mark

Re: construction contract laws
 

$6,000 of the extras is to the GC which they are happy to pay, but there contract is with the fabricator.

Mark

Re: construction contract laws
 

As was said by myself and AC upthread, it's impossible to tell without referring to the terms of the contract. What does it say about payments and invoicing and set-offs and changes?

If you've signed a contract that allows the fabricator to hold money as he sees fit, then yes, he can.

Re: construction contract laws
 

There is nothing about any money been held .A simple signed contract by both parties for $49,000 + HST, plus any additional work done will be extra cost. There is no agreement for him to deduct or hold anything,but also nothing stating what my costs would be. I want him to pay the contract he has signed, the extras can be discussed after.

Mark

Re: construction contract laws
 

Write a letter to him along these lines:

In accordance with the signed contractual agreement between us (copy attached), please find enclosed an invoice for $9,000 being the final payment due under the terms of the contract. Please arrange for payment of this invoice without delay.

Additionally, there are some extra works to the contract which must be finalized and payment agreed. These include:

(1) Provision of lift by Fabricator ($8,000 credit)
(2) Provision of works by Erector (xxxx) - describe the extras you performed
(3) Provision of works by Erector (xxxx) - describe the extras you performed
(4) Provision of works by Erector (xxxx) - describe the extras you performed

Total value of extras ($ whatever the net balance is.)

Please confirm when you will be available to review and agree these extras to enable the final account to be agreed and final invoice submitted.

Yours etc.

Re: construction contract laws
 

All these details were forwarded to him 4 weeks ago, my contract balance 8 weeks ago, he just doesn't want to pay. This is why I am asking about the money still owed on the signed contract.

Mark

Re: construction contract laws
 

Slap a lien on him?

Re: construction contract laws
 

OK thanks,
Think i'll inform him that is what I intend to do, unless the matter of the $9000 outstanding on the contract is resolved immediately.

Mark