Home owner disputed down payment causing my account to go negative. We signed a contract on the 19th he disputed and breached contract the day we where to start on the 24th.
Down payment shad already been used to buy materials.
1 reply
Oct 30, 2019
Before taking any drastic action, it might be a good idea to try and sit down and discuss the matter with the project owner. While they may be wary of a hefty down payment (causing them to stop payment), if you can show them where the downpayment is going to, then it may be easier to work with them moving forward.
Breach of contract
Further, note that certain actions may result in a material breach of the contract, but others may not. And, if the project is to move forward, asserting the agreement has been breached and seeking damages may tank those efforts. Plus, unilaterally declaring a breach that's not supported by the terms of the agreement might even compound the potential dispute.
For more discussion on what kinds of actions will or won't constitute a breach of contract: Construction Contracts | A Deep Dive on Breach of Contract.
With all of the above information in mind, it can be hard to sort out who owes what when a project is terminated. If there's no clear termination provision that applies to the project, it's usually a good idea to try and mitigate the damages that are in play. Regardless of who will be held responsible for payment, the parties must usually do what they can to reduce the overall costs associated with the termination.
For instance, if materials have already been purchased, attempting to return those materials may be a good idea. Often, a supplier will accept returned materials and tack on a smaller restocking fee. So, a contractor may reduce the amount of risk on their plate by returning materials for the purchase price, less the restocking fee, and then passing the restocking fee along to the project owner.
Bottom line
When a project goes sideways or is even terminated before it starts, it's a good idea to approach the situation with a calm head. If a reasonable agreement can be made to part ways, then it might be a good idea to work toward that. But, to get the best idea of what rights may be available to you, it would likely be helpful to consult with a local Missouri construction attorney. They'll be able to more thoroughly review your situation as well as any relevant documentation and advise on how best to move forward.