Nearly every project owner has two questions:
- What’s it going to cost?
- When can you be done?
Your answer to the cost question should include a question. See my blog post about cost estimates. Your answer to the completion question has to be different. I’ll explain.
Seventeen states (AZ, CA, DC, HI, IL, IN, MA, ME, MD, NV, NY, PA, TN, VA, VT, WI, WV) require an estimated completion date in home improvement contracts. That’s reason enough to specify a date. But even if you don’t work in any of those seventeen states, there’s another good reason to put a completion date in your contract. It’s called the parole evidence rule. If that’s Greek to you, keep reading.
A Minnesota case decided last week makes my point.
Matt Schindele agreed to have Build 218 remodel his rental unit in Bemidji, MN: counter tops, sink, cabinets and appliances in the kitchen, a tub and vanity; siding, drywall, windows, plumbing and electrical work. The contract price was $130,915. The contract didn’t mention a completion date. A date is not required in Minnesota home improvement contracts. But Schindele claimed an oral agreement. Work should be finished by June 2022.
The job ran longer than expected. And Schindele wasn’t happy with the work. Schindele filed suit for defects in the job and claimed late completion. Slow completion delayed sale of the property. That reduced the sale price.
The trial court dismissed Schindele’s complaint. He got nothing for either defects in the job or late completion. Schindele appealed.
The appellate court reversed the trial court’s decision. Schindele will get another chance to prove damages for late completion. The court’s reasoning hung on the parole evidence rule.
When a contract covers some issue, courts exclude any evidence that would vary, contradict or alter the written agreement. When a written agreement is incomplete or ambiguous, parole evidence is admissible in court to explain what the parties intended. Because Build 218’s contract didn’t specify any completion date, Schindele will get another chance to fill in his understanding. That’s any contractor’s worst nightmare: An owner explaining what a contractor promised (orally) and failed to deliver.
The Answer is Simple
Include an estimated completion date in your contracts. Some contractors don’t like that. Too many things could go wrong! Of course. We all understand that. Specify an estimated completion date and then append a list of contingencies. No state prohibits that. Construction Contract Writer makes it easy:
Any of the following shall constitute excusable delay for which the contract time shall be extended: Labor dispute, limits to site access, act or neglect of a public authority, shortage of labor, materials or equipment, scheduling conflicts, neglect of the owner or designer, unanticipated site conditions, delayed payment of invoices, casualty loss, epidemic or unusually adverse weather.
Add to that list any way you want. But you’re getting the idea. Drop a date in your contract. Then add a paragraph of contingencies. The only limit is your ingenuity.