What can I do if we were hired to do specific work on a contract but there were overruns?

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What can I do if we were hired to do specific work on a contract but there were overruns?

During construction we were given designs and specifications of a competitor’s proposal and were told to do that. It included work outside our contract and another subcontractor for us to complete. They were told of lengthy delays and additional costs and were aware at all times this was not part of our contract, Now they refuse to pay. I have been forced to resort to filing action in small claims court for $7000. They have a team of attorneys working for free on it and I need advise on direction, etc.

Asked on December 29, 2015 under Business Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The primary issue is: what did the contract say? If you were to do the project for a fixed price--that is, there was no provision in the agreement for additional charges--then anything within the scope of the contract had to be done for that price.
You write that the extra work was "outside of our contract"--but was it? Or even if it was, while you say that they "were aware at all time this was not part of our contract," if 1) on the face, it would seem to be part of the contract; 2) you never specifically said, "this is not part of the contract and we can't do this within the contract"; and/or 3) you did the work without getting approval, first (before doing the work) for an additional charge, the the other party was likely entitled to conclude that the work *was* within the contract. It is incumbent on the vendor/contractor to push back when asked to exceed the contract terms, especially if the work or deliverables is related to or arguably falls within the bounds of the contract, or else the customer can assume that by your silence, you agreed that the work was within the contract. In that case, if the contract was for a fixed price, they can presume there are no additional charges.
So in addition to the primary issue of the contract terms--whether it had provision for additional costs--the other key issue is what was said by you. If you never said explicitly that the you couldn't do the work, that it was outside the contract, that it would require additional payment, etc. the customer could assume--and a court would likely find--that you agreed to do the work as part of the base contract.


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