What contractor hasn’t thought about pulling the crew off a job when things are just going from bad to worse? Maybe the contractor is not getting paid what was billed or the owner keeps asking for changes to the original scope of the work. Whatever the reason, it’s tempting to call it quits.
Better think again. Walking off a construction project is not something to be done without some careful thought. Is there a contract? If so, there are likely to be notice and termination provisions that have to be followed. A contractor could quickly find himself in court accused of breach of contract and be sued for damages. Not only might he be responsible for the cost of the owner or surety having to find a new contractor to finish the contracted work, but the contractor could also be required to pay back some of what he has already been paid.
Walking off a job does come with some significant risks. Before making make such a drastic decision, do these four things:
- Determine if there is a valid construction contract in place, and if so, see what termination options are and what notice provisions are required;
- Figure out how much money has been paid in relation to the work completed and whether more money has been collected than earned;
- Calculate what materials have been ordered but have yet to be delivered, what’s been paid for, and whether notices to owner and claims of lien are in place;
- Meet with the owner and try to reach an amicable resolution—a distasteful settlement may still be a much better result than a drawn out lawsuit.
Making an emotional decision to walk off a job may feel good but the eventual fallout could be expensive. Savvy contractors become informed before they let their feet do the talking.