Contractor Without a Contract

Contractor Without a Contract

Nearly all public works projects are done on terms set by the public agency. The contractor has little or no say in the matter. It’s only on smaller residential and commercial jobs that contractors get to shape the agreement – offer terms likely to save the day if the job goes bad.

It should be obvious: Contractors with an opportunity to write their own agreements should jump at the chance. Yet, some don’t. Here’s an example:

Jennifer English needed some improvements to her home in Wallingford, Connecticut. Jonathan Ohr of Major League Builders agreed to do the work for a flat $50,000. There was no written agreement. According to Judge Abrams, “Mr. Ohr was not in the practice of entering into written contracts with his home improvement customers.” You can probably guess what happened next. The case is English v. Ohr, 2018 Conn. Super. LEXIS 5898.

With $46,800 paid and work still to be done, Ms. English locked her contractor off the site. The court didn’t explain what went wrong on the job. But the judge agreed that: (1) Mr. Ohr could have completed the job if he had access to the site. (2) By denying access, Ms. English committed an anticipatory breach of the verbal agreement.

There was no written contract for this job

Normally, that would entitle the contractor to damages and probably attorney fees. But remember, there was no written contract for this job. And that was a problem. Connecticut is one of the 31 states and the District of Columbia that require a written contract for residential work: AR, AZ, CA, CT, DC, DE, HI, IL, IN, KY, LA, MA, MD, ME, MI, MS, ND, NH, NJ, NV, NY, OH, OR, PA, RI, TN, TX, VA, VT, WI, WV and WY.

It Gets Worse
Under Connecticut’s Home Improvement Act, doing work without a contract is an unfair trade practice. That authorized Judge Abrams to award punitive damages against both Mr. Ohr and Major League Builders. The judge didn’t do that. But the court’s opinion leaves no doubt about who was at fault in this dispute. If Ohr had a signed contract:

[T]he parties would have had a concrete memorialization of the scope of the project that would not have allowed for inconsistent expectations. As a result, the project could have been completed without significant incident and this litigation avoided.

In essence, the lawsuit was Ohr’s fault. So Ohr was ordered to pay the reasonable attorney fees of Ms. English.

Absence of a written contract

Notice how absence of a written contract on the English job changed everything:
According to Judge Abrams, there was no true agreement on what the job required.
Ohr didn’t collect the last $3,200 due under his oral agreement.
Ohr didn’t have the protection any good contract would have provided.
Ohr had to pay both his own attorney fees and the fees of Ms. English.

Jonathan Ohr isn’t the only contractor to do business on a handshake. If that’s how you operate, have a look at Construction Contract Writer. Before you start any job, use CCW to write a construction contract that’s perfectly legal in any state where you build or remodel. The trial version is free.