What makes a work order a binding contract?

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What makes a work order a binding contract?

My husband and I run a home improvement company. We have sales representative’s that go to customer’s homes and have them sign work orders for our company to do work. We ran into an issue with a customer that signed a work order with us but never paid half down. Come to find out the job was extremely underbid and the customer is an attorney. He is trying to force us to do the work for the work order price even though he never paid the initial half down. Are we in a breach of contract to not do this work?

Asked on September 13, 2011 under Business Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You have to look to the terms of the work order--and if the work order does not have all the terms on it, then you need to look to what was orally (or verbally) said, since an oral or verbal agreement is valid, too.

If the agreement--again referencing either the terms on the work order itself, or oral terms--required that a 1/2 deposit (1/2 down) be placed upon or shortly after signing, then the customer's failure to place that money down would be a violation or breach of the contract could let you out of it. However, there is no law that says that money must be placed down or deposited upfront; it's obviously legal to have a binding contract where all payment is made upon delivery or acceptance of work. In that case, the contract could be enforceable despite the failure to put down a deposit. So the terms of the agreement, whether written or oral, are critical in determining enforceability.

That said: you say he is an attorney. Therefore assume that he could more cheaply take legal action against you than you could against him--he could represent himself effectively, after all.  Even if the contract was  underbid, if you are at all in the black--even if you are marginally in the red--on it, it  may make more sense to comply than risk a legal fight with someone who may be in a better position for it than you.


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