Buyer’s Remorse

Every residential contractor can think of a dozen good reasons to have written contracts. Last week, a Wisconsin appellate court piled on still one more reason. I’ll explain.

In the winter of 2014, Pat and David Sandlund were thinking about improvements to their home in Door County, Wisconsin. If you’re not familiar with Wisconsin geography, Door County is north of Green Bay on a peninsula that extends into Lake Michigan. Winters are cold in Door County. And that’s part of our story.

In the spring of 2015, Pat and David talked with Progressive Carpentry about replacing the windows and shingle roof on their home. Rich Birnschein and his son run Progressive Carpentry. Both Birnscheins met with David at the Sandlunds' home on July 22. According to Rich, Dave gave Progressive the go-ahead to order shingles and Andersen replacement windows. While at the Sandlund home, the Birnscheins took measurements for the windows and a sliding glass door. Later Dave and the Birnscheins met at a building supply warehouse to select the exact window style. Progressive placed the window order in August, 2015.

The first thing to know about replacement windows is that they’re custom-made. All have to fit precisely in an existing wall opening. Even the dual-pane insulating glass is custom made. A second point about replacement windows should be obvious. They’re not cheap. Custom replacement windows and doors for a 4-bedroom home can run $40,000 or more.

Two weeks after ordering the windows, Progressive sent Dave Sandlund an email with some news.  The shingles had arrived. Dave replied with more news. He had a change of heart:

The kids think I am nuts to spend that much on the house at this stage of our lives ... The kids are now looking for someplace for us to move to warm and easier living ... I must admit this whole process has gotten me to thinking about just selling and moving on. I love it up here but maybe it is time for us to move on. Naturally I am not going to let you get stuck with any material costs that you have incurred but no decision has been made yet.

Birnschein tried to salvage the project. But the Sandlunds wouldn’t budge – and wouldn’t pay for the windows. Birnschein filed suit.

At trial, an attorney for the Sandlunds had powerful arguments:

• There was no contract. Wisconsin’s Home Improvement Practices Act, Wis. Admin. Code § ATCP 110 requires a written contract for home improvement work. Oral agreements in violation of the law are said to be unenforceable against the owner.
• The Sandlunds didn’t authorize the order. Again, there was nothing in writing. Progressive was stuck with the windows.
• There was no building permit. Work never got beyond planning and ordering materials.

What the Court Decided

The court sided with Progressive.The Sandlunds authorized Birnschein to buy the windows. The Sandlunds and Progressive had an oral contract. “It is a grave error to assert that all contracts in violation of a statute are unenforceable.”

This case is a prime example of buyer's remorse . . . [The Sandlunds] intended to have [Birnschein] do additional remodeling work on their home and authorized him to order the windows and shingles. When [the Sandlunds] procrastinated long enough into September and [Birnschein] then told them he couldn't get to their project until the spring of 2016. . . [the Sandlunds] got angry and then had someone else do the work.

The court awarded Progressive reimbursement for the windows -- but not their loss of profit. If Progressive had a written agreement, as required by Wisconsin law, the result could have been very different. Progressive would have collected for the windows, loss of profit plus attorney fees.

With a written contract, buyer’s remorse won’t affect your jobs. Construction Contract Writer makes it easy to put it in writing, no matter where you build and no matter the type of project.