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Question DetailsAsked on 11/4/2016

i gave a 1/3 of cost deposit that is required by my state and they have not started the project more than 3 weeks a

after contract signed with start date indicated. what are my options? Do I cancel project?

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2 Answers


First off - no state REQUIRES a deposit on contracts. Some limit how much it can be, but none mandate a deposit be paid. If he told you that, I would consider that a scam red flag.

Assuming he is past the contractual start date (contract should have had a mandatory finish date too) you MAY be able to cancel the contract for non-performance. There are legal precedents I have heard of where a mandatory start date was held by the courts to not be adequate cause to terminate a contract - the reason being the court said starting late does not necessarily mean it will be finished late if he accelerates the work or puts more manpower into it, and completion by the finish date is basically what you are paying for - so as long as enough time remains to realistically complete the job by the contractual completion date if he starts soon, the contractor could still do the work and fulfill the essential terms of the contract.

Not saying what the type of contract is, but is it possible that he has ordered materials and is waiting for them to come in. Custom cabinets or windows/doors, for instance, commonly take weeks to even months to come in. You also did not say if you have communicated to him about the delay - your first step would probably be to ask him (preferably in writing - say eMail, so there is a record of it) why he has not started, and making a point of the contractual completion date if there is one. Good time to do a contract amendment stating a mutually agreed-upon completion date too, if there is not one, because a contract is not a fully legal contract without a period of performance - time frame in which the work will be performed, or a completion date for the work (except in employment contracts and some types of leases and such where it is open-ended with no formal completion date, though in those cases there should be a provision for how the agreement can be terminated by either party).

Your first step would be to send a certified mail signature required return receipt letter to him stating (depending on whether you want to try to keep him on the job or not) either:

1) that he is past the start date, and you demand work be begun within X days (a reasonalbe time, say 3-7 depending on type of work and lead times required) or void the contract (in writing) and refund your deposit (and make clear that the completion date, if there was one, is NOT being extended), or

2) that because he has not begun, you want him to refund your deposit and void the contract (in writing).

Note that these do not say YOU are voiding the contract - rather than you want HIM to refund the deposit and mutually void or cancel the contract. That way you are not making the termination, leaving your legal options open and leaving his insurance and bonding in effect. I have heard of people who "fired" or terminated the contract for non-performance, and the insurance company and bonding company then said any claims were invalid because there was no contract in effect.

A third option, if you think the price he gave is better than competitors would give, is calling his Bond, to have the bonding company arrange with another contractor to complete the job for the same total contract price. They would then be responsible for completing the job and for getting the deposit back from the contractor - or covering that amount with the new contractor. Of course, doing this kills any relationship with this contractor.

You also have a possibility of a claim against his insurance company if he will not return the money, as a fraud or deposit theft claim against him.

You did not say if you checked this contractor out on Angies List or Yelp or such - but if you suspect possible fraud double-check that his licenses with the state are still valid, and you might google for complaints about his company and check with local/state consumer fraud division (or similar name) to see if there are a record of him taking deposits and running, as a scammer.

Note if the contract is terminated (as opposed to voided), that you should get a lien release from him so he cannot come back and put a lien on your property. And in this sort of case, the termination should stipulate that no work has been done so no payment is due - if terminating (as opposed to mutually voiding or cancelling the contract) a lawyer should do that so yuou are not stuck with a possible lingering liability or lien risk.

Here are a couple of links to similar questions with answers FYI -

Answered 3 years ago by LCD



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