QUESTION
Contractor went overbudget without warning or permission. Do I have to pay above what was originally agreed up?
Asked on Jul 11th, 2012 on Construction Law - Colorado
More details to this question:
On 3/14/2012 I agreed with my contractor to build a one room, one bath, cabin in Colorado for $104,517. On 5/10/12 I received an invoiced that showed that all of his subcontractors were on budget or below budget. The next day (May 11th) I received the following email from my contractor that stated, "As we sit right now with work completed and material on site we are $44.00 over. All items considered we are doing really good on budget!!" On 6/6/12 I authorized the contractor to do an extra $6,000 of landscaping bringing my bill total to $110,517. With one week left to finish the cabin I got on 6/19/12 an invoice for a total bill of $118,194. And then upon completion he gave me the final bill on 7/2/12 for $130,258. Both of these last invoices where completely unexpected, and with no warning. All the overruns was not by his subcontractors, but by his crews. On 7/9/12 I made a final payment to the contractor of $112,000 on what I felt was fair. Do I have a case to not pay anymore?
1 ANSWER
Construction Law Attorney serving Denver, CO
at
Higgins, Hopkins, McLain & Roswell, LLC
Update Your Profile
I hate to say that it depends, but it does. There are a lot of factors that go into the analysis, for instance, does the contract have a guaranteed maximum price or is it a cost plus fee contract? Were there unforeseeable changes in the scope of work or site conditions that caused the increased cost?
Not knowing what the contractual arrangement was between you and the contractor, and not knowing the cause for the increased costs, it is difficult to determine whether you have a case to not pay any more. My suggestion would be to put together all of the paperwork you can gather between you and the contractor, including the contract, plans, communications, pay requests/invoices, and receipts for payment and schedule a meeting with an attorney who specializes in construction law to determine whether there is a legitimate case to not pay more.
Answered on Jul 12th, 2012 at 1:08 PM