If I have a customer and we signed a contract for work to be done, how much can I retain for their breach of contract?

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If I have a customer and we signed a contract for work to be done, how much can I retain for their breach of contract?

Upon the starting date which was set for 8 days after signing I personally ended up in the hospital my crew went to start said project and were turned away and demanded their money back. There is cost such as material 3 guys wages subs loss of income for the 4 days of scheduled work, etc.

Asked on September 28, 2015 under Business Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If there was a contract and you did not breach its terms, then the customer breached it by sending your crew away and not letting the work be done. In that case, limited by or subject to any right of cancellation, etc. in the contract which, if it exists, the customer must have complied with, or followed the terms of, to take advantage of, you should be able to retain an amount equal to all spent/incurred expenses or money as well as equal to the profit after all expenses you would have made. E.g. say that the contract was for $10k. Realistically, you expected $7k of expenses--materials, labor, permitting fees, etc.--and $3k profit. You actually spent $2k on materials and wages. You could potentially get that $2k plu the $3k profit you expected to make.
If you breached the agreement in some material or important way--e.g. if the contract, for example, required you to be present for the starting day or be personally involved in the work, and you weren't--you may have to refund all the money.
As you can see, generally the key issue is who breached, or violated, the agreement. The above however is just a general rule contracts are governed by the specific terms or language, so you have to review carefully what the contract says to determine all your rights or obligations.
 


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