What to do to get a manufacturer to fully reimburse a flooring contractor for a re-installation regarding incorrectly milled hardwood?

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What to do to get a manufacturer to fully reimburse a flooring contractor for a re-installation regarding incorrectly milled hardwood?

I have a business installing hardwood floors and recently installed a floor that was milled incorrectly. After sorting it out with my distributor and the manufacturer, the manufacturer accepted liability for the claim. The manufacturer is now trying to tell me what they are going to pay me now that I have re-installed the job and it is not acceptable to me. What I am claiming they owe me which is supported by local market rate and my original proposal to the client is a little over $7000. They want to pay about $4400. I anticipate them refusing my invoice and intimidating me with big business talk. What can I do? Is a lawsuit a slam dunk for me? Is the threat of suing them enough to make it not worth their while and just pay me?

Asked on September 20, 2012 under Business Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The manufacturer would be responsible for paying you 1) any additional material costs you incurred; and 2) any additional labor costs. They do not need to pay you based on your proposal to the client, unless their error caused you to lose the client and the profit from the job--then they would reimburse you your profit plus any costs you did in fact expend based on their error, but could offset against that any savings (if any) you had due to the job not being completed.

Assuming though that you did not lose the job or client, then again, their liability is for your additional costs. If those costs are less than the amounts you quoted your client, that's all you'r going to get. For example: say you quoted the client $7k for the floors. In terms of additional materials you had to buy and additional labor costs to you, say you spent an extra $4.4k over and above what you anticipated; in that case, they would owe you $4.4k, not $7k.

In terms of whether or not the threat of a lawsuit would make them back down--there is no way to be sure, since that depends on corporate "temperment" and culture. Some companies fight everything; others will happily pay a few thousand dollars to avoid court. There is no way to know in advance what this company is like.


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