Mike
and Cheryl Ording had a leaky basement in their Milwaukee home. A salesman for Everdry
Waterproofing offered to solve the problem. According to the Ordings, the salesman
claimed they “would never have water in
their basement again” if Everdry did the waterproofing. Reassured, the Ordings signed
the contract.
A few weeks after work was done, the Ordings noticed water in their
basement. They called Everdry. Before Everdry showed up, a storm flooded the basement
five feet deep. Everdry offered to lend the Ordings a pump but insisted that any
damage was not their problem. The Ordings sued.
At
trial, the jury awarded the Ordings $7,000 in damages. That was doubled to $14,000
under Wisconsin’s Home Improvement Practices Act. A violation of HIPA is also an
unfair trade practice which allowed the Ordings to collect their attorney fees,
$41,000 in this case. So the contractor was on the hook for $55,000. But that was
only the beginning. Everdry’s attorney fees were $118,896. That made the salesman’s
promise a very expensive mistake.
Now
notice this. The award wasn’t for breach of warranty or breach of contract or negligence
in doing the work. Instead, the jury found that Everdry made a false oral promise
when selling the job – the Ordings “would never
have water in their basement again.”
Protect Yourself
How
many times have you made a promise when selling a job? There’s risk every time you
forecast results such as durability, matching colors or textures, performance, a completion
date – anything that raises expectations or could be misinterpreted. Let the contract,
the plans and the specs describe your task. That’s step one.
Step
two is known as a contract integration clause. Here’s a sample taken word-for-word from Craftsman's Construction Contract Writer:
This contract is the entire
agreement and constitutes a complete integration of all understandings between Contractor
and Owner on the subject of the Project. This Contract supersedes all prior negotiations,
representations and agreements, whether written or oral.
An
integration clause makes good sense on two levels. First, integration voids statements made before the contract was signed. Those statements aren't part of the deal. Second, courts like integration. Interpreting any agreement is easier when there’s
just one contract, not a list of oral promises and side agreements.
Would
the jury’s decision have been different if the Everdry contract had an integration
clause? I think we know the answer to that question. The Everdry contract did have an integration clause. Unfortunately for Everdry, their counsel
didn’t raise the issue until after the jury verdict – too late in the opinion of
the appellate court (2015 Wisc. App. LEXIS 275, April 14, 2015).
A Simple Suggestion
Are
your contracts as good as your work on site? It’s easy to write iron-clad
contracts fully enforceable under the law of your state. Get Construction Contract Writer. The trial version is free.
