Consumer Law, Warranties Roofing contractor proposal/agreement dispute

Discussion in 'Consumer Law, Contracts, Warranties' started by plugeman, Aug 15, 2009.

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  1. plugeman

    plugeman New Member

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    I recently signed a proposal/agreement to use a particular roofing company in the event they were able to secure an insurance claim. The claim is for hail damage to my roof. The roofing company was successful and the insurance company is paying for the roof. The issue is the roofer wants the entire first insurance check ($9500) up front which is approximately 70% of the total agreed price.

    I was very careful to read the agreement before signing and nowhere does it say any payment is required up front. On the back of the agreement is a statement says: “Payments are to be made upon date of delivery of material, and balance upon completion of work, other arrangements must be discussed with credit manager.” On the front under Terms of Payment, it is hand written “AS IS INSURANCE”. The “as is insurance” part I believe could be interpreted many ways, but not that I will hand over the first insurance check in advance.

    I have become very weary of this company since signing the agreement and would ideally like to dissolve the agreement. The agreement also states “This proposal will expire in 90 days from the date accepted unless extended in writing by the Company” There’s no reference in any as to when the work is to be done. I have a year to recover the depreciation from the insurance company so I’ve got some time.

    My questions are:

    1. If I just delay this whole thing past the 90 days am I in the clear, or, could they extend it and still hold me to the agreement without my consent?

    2. Is there any way to interrupt the Terms of Payment “AS PER INSURANCE” to mean I am obligated to give them the entire first insurance check up front?

    They say they need the money up front to cover most of the material costs. The fact is the material costs are only about $6000. I have told them I will not pay a dime until at least materials are delivered with a LIEN WAVER from the supplier.

    3. How would you determine based on the only two items in the agreement pertaining to payment terms, how much I’m obligated to pay at the time of material delivery? The term “AS IS INSURANCE” seems very loose. Since the insurance company doesn’t stipulate payments to the contractor, what does that mean? In my view, I see the agreement to read…..the first payment will be made at time of material delivery in the amount determined by the insurance company for material cost; the remainder to be paid at upon the completion of the job.

    I have thought about offering to just pay the supplier myself, if carrying the material cost is a concern. That would also take care of any lien issues from the supplier. The roofer is legitimate and has been around for a couple of years. I really don’t think they’re trying to scam me, but I can’t agree to pay that kind of money upfront.

    Thanks in advance for any help,

    David
     
  2. thelawprofessor

    thelawprofessor Administrator Staff Member

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    You should negotiate the specific terms with this company in advance. If your insurance company has approved the repairs then you can get any other company to do the work without fear of a problem. I agree with you that I'd not pay 70% up front unless there was very good reason. Usually there is a deposit amount that is below 50% and there are milestones for completion that must be met before the contractor is paid.

    1. If the up front payment isn't in the agreement, then you don't have to pay for it. If they refuse to move forward, then they have breached the agreement. If the agreement is already signed, the "proposal" has already been accepted.

    2. I have no idea what "as is insurance" means. Right now, you have the money and I wouldn't part with it until it is clear how to work the terms going forward.

    3. Typically the first payment is made to cover the materials that the contractor ordered and delivered to begin work. That might be a milestone to provide an additional payment amount.

    I don't have the contract so I can't see the terms. If you're preapproved for insurance, it's up to you to tell them not to bother if you don't feel the terms are fair and that they cannot be trusted to complete the job. Good luck.
     
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