Can a homeowner back out of contract with a general contractor after the claim is approved by the insurance company?

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Can a homeowner back out of contract with a general contractor after the claim is approved by the insurance company?

A homeowner signed a contract with us stating if our estimate was approved by the insurance company that we would be doing the repairs. We know the claim was approved per the insurance company but the homeowner won’t talk to us now. I’m not sure if they are just wanting to keep the money or hiring someone else.

Asked on November 21, 2011 under Business Law, North Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you are a licensed contractor and have a valid contract with a homeowner for a work of improvement on his or her home subject to no remaining contingencies, the homeowner can back out of the agreement for you to do the work.

However, if the homeowner breaches the agreement and you do not do the work of improvement, your damages as a licensed contractor would be the net profit that you would have received on the job. I would write the homeowner a letter stating that you are ready, able and willing to begin the job requesting a start date and see what happens. Keep a copy of the letter for future reference.


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