What are our rights if a contractor performed work beyond our agreed scope of work, so now has the is little money left to complete our house?

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What are our rights if a contractor performed work beyond our agreed scope of work, so now has the is little money left to complete our house?

We hired a contractor in August for a room addition. I provided a scope of work list for the project and we agreed on $72,000 for the work. We have a signed contract and the contractor also signed scope of work document. We have paid him $65,775 so far. The remaining balance left is $6,225. From this remaining amount, he will pay $4,000 to the electrician. He has only completed the foundation, plumbing, framing, roof and electrical on the scope of work. There is still a lot left – insulation, dry wall, siding, installation of fixtures/carpet/flooring/tile with $6,225. I told him that we were going to hold the $6,250 until all the work is completed. He has stopped working and won’t continue until he gets more money. He is now asking for more money for work that he completed outside the scope of work and without discussion or approval in writing or verbally from us. For instance, the plans call for 2′ foundation but he put in 3′ which cost him more. We never agreed to put in the deeper foundation and the county inspector said he didn’t need to do that because the plans called out for 2′. As a homeowner, what are our rights? Can we fire him and sue him for the work that he hasn’t completed?

Asked on February 6, 2017 under Real Estate Law, California

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You can sue the contractor for breach of contract for doing work beyond the terms of the contract without paying the remaining balance.  
Your damages (monetary compensation you  are seeking in your lawsuit for breach of contract) should include the cost of completion whether or not you hire another contractor and any overpayment you have made to the original contractor for work not completed.  You can also recover damages caused by the breach of contract; for example, costs incurred from the delay in completing the project on schedule.
If you hire another contractor to complete the work, you will need to mitigate (minimize) damages by hiring someone whose fees are comparable to other contractors in the area.  If you were to hire the most expensive contractor you could find, you have failed to mitigate damages and your damages will be reduced accordingly.


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