What Happens if a Contractor Abandons a Job?
You hired a contractor. You paid the contractor. Then halfway through the project, the contractor disappeared on you. Now you’re stuck with a half-completed project, unused materials, limited funds, and no idea what your next step should be.
Unfortunately, this happens to homeowners more often than it should. If you’re wondering what happens if a contractor abandons a job, we have the answer.
What Happens if a Contractor Abandons a Job?
You Can Sue for Unfinished Work
Though it’s not likely to be your first option, you can sue a contractor for abandoning your project. However, you must demonstrate that the individual contractor or company you’re suing failed to fulfill contractual duties.
This means they:
didn’t complete the work as agreed upon (breach of contract), or
did a subpar job that fails to meet reasonable or industry standards.
You and your attorney will build a case around the specific job description in your contract. You should be ready to answer questions, like:
How much of the work did the contractor abandon in relation to the amount of work described in the contract?
How much did you pay for in relation to the amount of work completed?
Did the contractor have any cause, outlined in the contract, that would justify his abandonment of the project? Often the contractor’s first defense is that he was prevented from completing the project.
Do you know for certain the contractor has quit the project, or has some other factor caused an indefinite delay?
Reasons the Contractor Quit the Project
A contractor is subject to legal action if they abandon a project without a legal right to terminate the contract. However, legal justifications for walking off a job do exist, for example:
The contract allows the contractor to halt work for nonpayment and you are at least one payment behind.
An unforeseen injury to one or more key laborers or subcontractors has temporarily halted work due to a lack of manpower.
An inability to acquire key materials has caused an indefinite delay.
These are just a few examples, however, none of them have to lead to a cancellation of the contract and subsequent legal action.
If your contractor has walked off a job you’re paying them to do, you have some options before jumping straight to litigation. Let’s take a look at some of them.
Steps for Handling a Contractor Who Won’t Finish Work
Keep Lines of Communication Open
You have work that needs finished, and a lot of money tied up in the project. So first, try to talk to your contractor and see if a resolution is possible. Can the contractor’s issues with your project be addressed with a temporary delay? Are you willing to mutually part ways with the contractor in return for a partial refund?
Document Everything
Keep a record of your attempts to contact your contractor. Save text messages and emails, regardless if the contractor replies to them. Keep contemporaneous notes, save invoices, and back them up by taking photos of them with your smartphone.
If your contractor has walked off the job, you’ll want to take pictures of the state of the project. Hopefully you took photos before and during the work. Photos are important, not only for possible litigation, but to help a future contractor more easily pick up where the project left off.
Terminate the Contract
If you can’t work out a way to get your contractor back on the job, then you can end the work relationship. In fact, you can now treat the situation as a breach of contract by the contractor.
Once one party — the contractor, in this situation — makes clear through words or actions that they do not intend to perform their contractual duties, this is called a “repudiation” of contract, which means you can immediately claim a breach of contract and seek legal remedies.
If the contractor has not affirmatively repudiated the contract certain facts could create a situation called an anticipatory repudiation of contract which also creates justification for claims of breach of contract.
Tap their Bond
Most professional contractors are licensed and may be bonded. A bond is a kind of insurance policy licensed professionals are required to carry. It pays out claims to clients who have been harmed by the contractor’s failure to do their job.
If your contractor is bonded, you can file a complaint with their licensing board against their surety bond to get at least a partial reimbursement for damages or costs.
File Suit
Colorado small claims courts, which are held at the county level, cap damages at $7,500. Going to small claims court may be an option if you have a relatively minor construction project.
If you believe you can recover enough funds to complete your project with the limited damages cap, and you have an air-tight case, small claims could be the way to go. You’ll save on legal fees and receive a quicker verdict.
Hire an Attorney
If your losses exceed $7,500, your best course of action is to hire a litigator with experience going after unscrupulous contractors. An attorney will help you determine if a lawsuit is worth pursuing. In many scenarios, when a contractor leaves unfinished work, they have breached the contract and can be held liable for your damages including the costs you incur in completing the project beyond the contracted amount.
Damages You Can Recover When a Contractor Leaves Unfinished Work
If you win a judgment in a simple breach of contract case, the damages are straightforward: The contractor must reimburse you the cost of repairing or completing the work they abandoned.
Example: You hired your contractor to do a $40,000 kitchen and laundry room renovation, and you paid all money up front. The contractor walked in the middle of the job, and, eventually, you had to hire someone new to finish the work. The new contractor’s cost was $30,000. In total, you are out $50,000 on a job that should have cost only $40,000.
Since your contractor completed half of the project before quitting, they must reimburse you $20,000 for the unfinished work. In addition, he must reimburse you the $10,000 you had to pay a new company to finish the project. That brings total damages to $30,000 plus any attorney fees or legal costs provided for in the original contract.
Construction Trust Fund Statute Violations
If a contractor took funds designated for your project and diverted them elsewhere, they could be on the hook for treble damages (3X) and even possible theft charges.
It follows then, that if a contractor took all the money for a project up front, but left the job unfinished, they have possibly violated the trust fund statute. For this, you could be awarded treble damages, which is actual damages times three.
Let’s go back to the example from above. The contractor already owed $30,000 in actual damages for abandoning your renovation project. However, in this example, the contractor failed to comply with earlier requests for the $20,000 reimbursement, the amount that he did not earn on your project and likely spent wrongfully.
Now your damages triple. Rather than owing you $30,000, as in the example above, the judgment award expands to $70,000 (20,000 x 3 + the $10,000 beyond the contract amount that it cost to get the project completed) plus possible attorney fees, costs, and interest.
Find Out What to Do if a Contractor Doesn’t Finish a Job
It can be incredibly frustrating to deal with unfinished contractor work, especially when you’re left with no good options. Our real estate litigation attorneys take on all unscrupulous contractors who attempt to take advantage of homeowners. If you want to know what happens if a contractor abandons a job, talk to us about your legal options. Call (720) 797-1976 for a case assessment.
