Can a contractor force us to pay higher interest after the fact on financing if we did not agree?
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Can a contractor force us to pay higher interest after the fact on financing if we did not agree?
We met with contractor for waterproofing our basement and quoted us financing of 9.99% so we agreed to have them do the work. We filled out all of the apps and they came and did the work. Now after the work has been done they said we did not meet the requirements of this particular financing company but they have another company at 11.99%. Shoudn’t they have been required to inform us of that prior to the work so we could make decide whether or not we want to agree to that interest rate and terms of loan? Do we have any recourse?
Asked on May 30, 2012 under Business Law, Ohio
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If there was a contract in place for you to be charged 9.99% interest, that contract is enforceable--you may not be charged more than that. Even if the contractor could not find interest that low, it can only charge you 9.99% and will have to make up the difference out of its own pocket.
Or even if the contract did not specific the rate, if the contractor represented, or promised, to you that you would pay 9.99% interest and that representation was a significant factor in you hiring them, you may be able to hold them to that promise under the theory of "promissory estoppel."
Only if there was some clear disclosure (prior to you agreeing to have them do the work) that financing was subject to availability or change and you--in full knowledge of that possibility--went ahead with the work, would they seem to have a basis for charging you more. Otherwise, they will be held to what they contractually agreed to and/or to what they represented to you to induce you to do business with them. If necessary, you can take legal action (sue them) to force them to honor their obligation.
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