I recently had a new roof put on my house. I entered a contract which was signed and dated for a specific amount to have the work done. AFTER the job was complete, the contractor came to me advising me that I owed him additional money stating that he miscalculated. He never stopped to come to me when he first realized his mistake, neglected to show me or tell me until after the job was complete. I refused payment since I have no clue as to what additional supplies were used. He has now served me with a summons to appear in small claims court in his effort to recoup his loss. Am I obligated to pay for his mistake?
It is very doubtful that he has a right to more money, unless there is something in the contract that provides an opening for that. There is one exception.- an equitable doctrine of "unjust enrichment" - if the contractor provided you with a significant additional value here that resulted in your realizing an unjust benefit, the court might be able to provide him some compensation for that. For example, if he made a mistate that priced a $25000 roofing job for $5000. However, it is doubtful that the facts would support such a situation, and the fact that he said nothing at all until after the job was completed would also work against him. However, small claims courts do not have equitable powers in most states.
Please note that I do not practice in your state and that the above is not intended as legal advice, is for educational purposes only. For legal advice, please consult an attorney in your state.
While I am not licensed to practice law in NC, a basic tenet of contract law in any state voids additional payment for work that a party was already obligated to perform. This is what's known as the "pre-existing duty" rule and typically safeguards against a party agreeing under duress to a new price for the same work. Here, the roofing contractor was already obligated to perform the re-roofing at an agreed fixed-price; the contractor therefore cannot seek additional payment for the exact same work. That said, where there appears to be no coercion or duress, courts will often look past the pre-existing duty rule and decide whether an unforeseen difficulty in the work might provide additional consideration for the parties agreement to increase the contract price. Importantly in this case, however, you never knew about the "miscalculation" or any unforeseen difficulties–let alone ever agreed to make additional payments in light of these difficulties.
Next, when it comes to construction contracts, the common law has long recognized an exception to the mutuality requirement (i.e., offer and acceptance) found in most contracts. So in the construction context, a contractor is often entitled to additional payment at the end of the job when the contractor performed work that was outside either the specific or general scope of the contract. These claims generally require some notice to the owner that the contractor has been directed (or implicitly required) to perform work that the contractor considers to be either a change or an extra to the contract. States vary in how strictly they enforce the contractor's duty to provide notice. But in this case, again, apparently no notice was ever given.
Your roofing contractor will not get very far simply arguing that he miscalculated the cost of the work. The contractor offered to do the work at a fixed price, you accepted, and the contractor was at risk for providing the agreed scope of work at the price you both agreed on. To recover, then, your roofing contractor will have to argue to the court that your contract did not contemplate the scope of work that the contractor was ultimately required to perform.
Depending on the contactor’s theory of recovery, the contractor will have to show either that he performed work that was outside the specific scope of the contract (e.g., the contract required he put four nails in each shingle, but you later required him to put six), or the work was outside the general scope of the contract (e.g., he had to frame the roof in addition to simply re-roofing it). In the first instance, because the contractor assumes the risk of means and methods, the contractor will generally have to prove either some affirmative direction from you to change the work or some ambiguity in the contract documents. In the latter instance, the contractor must demonstrate that the extra costs incurred were not reasonably foreseeable at the time you signed the contract; this category could include claims of anything from a particularly bad substrate that the contractor had no duty to know about, to unseasonably bad weather, to you preventing the contractor from performing his work.
Whatever argument the contractor attempts, it's important to keep the court focused on the risk allocation principles of all contracts--especially construction contracts--and the contractor’s risk in pricing the work and reasonably anticipating all the pitfalls and opportunities that typically come with a re-roofing job. Point out to the court that if the shoe was on the other foot and the contractor had finished the job with a huge profit, you would have zero right to a rebate from the contractor. Further, the court should understand the prejudice you suffer when the contractor is allowed to give you an inflated bill at the end of the job--long after the opportunity has passed for you to investigate the extent of the allegedly extra work and the contractor’s entitlement to additional payment.
Issues of unforeseen site conditions and/or changes in the scope of work aside, it sounds like you have a classic case of "unilateral mistake" on your hands. To be frank, the magistrate in small claims court will be more familiar with this concept than these other construction law-specific doctrines.
Although there are exceptions to the general rule, typically a contracting party is not entitled to rescind or change his contract with you due to a unilateral mistake on his part (including mistakes in calculating the amount of time or cost of performance), unless the other party had reason to know of his mistake or somehow caused the mistake. For example, if you had other estimates to do the work for $50,000 and this contractor offered to do it for you for $10,000, you would probably be held to have constructive notice of his mistake or at least an obligation to bring it to his attention.
It sounds like you had a fixed-price contract to have a new roof installed. If the contractor simply quoted you a price that seemed reasonable, and you did not fail to inform him of any factors of which you were aware that were likely to make the job significantly more difficult or time consuming, the contractor should not get very far in convincing a judge or magistrate to give him additional money.
That being said, if the contractor is successful in convincing the magistrate to award him additional money, you should be aware that you can appeal the small claims decision to the district court within ten days of the entry of judgment. The appeal erases the judgment and gives you a second bite at the apple. If that happens, I would highly recommend that you consult with an attorney before proceeding. If you choose not to have an attorney for the magistrate hearing, you should be sure to bring any written documentation you have with you, including copies of the contractor's estimates, the contract, invoices, receipts, and/or your cancelled check or proof of payment to him for the undisputed amount of the contract. Good luck.
Disclaimer: I am not your attorney and this answer does not constitute legal advice or establish an attorney-client relationship. I highly recommend that you consult an attorney practicing in your area as to your rights and/or responsibilities under the law.
