We are reader-supported. When you buy through links on our site, we may earn an affiliate commission.
Contractors are vital to helping you achieve your renovation goals, but what happens when they take advantage of you. Can you sue a contractor for overcharging? Here’s what you need to know.
When a Contractor Charges Too Much
The phrase “charging too much” could mean many different things so it is important to be specific if you choose to sue.
There are typically a few reasons you could say your contractor overcharged for their services.
- They charged for things they did not do or that you never asked them to do. An example is if you hired them to replace a toilet and they replaced a sink also.
- They added charges for tasks that should have been included in the original job charge, such as cleaning up the mess they made.
- They failed to complete the desired work but still want full payment.
Thoroughly review your contract to see what is vague and what is specific. Lawyers will nitpick the document so evaluating the terms is vital to knowing whether a lawsuit is worth your time and money.
Fixed Price Vs. Cost-Plus-Percentage
There are two types of contractor contracts: a fixed price or a cost-plus-percentage price.
Fixed-price is exactly what it sounds like–the contract specifies an exact price based on labor and materials prior to the project’s end. You have the number and by signing it, you agree that you will pay that exact amount.
A cost-plus-percentage contract provides more flexibility for both you and your contractor. You can review the expenses as they come in and the contractor receives a percentage for managing the project. While it is nice thanks to its adaptability, it can also cause trouble if you don’t carefully review each cost proposal.
A fixed-price lawsuit is simpler to navigate as it can be easier to identify a breach of contract. It is doable for cost-plus-percentage if you have written proof of approving something that was not delivered on or not approving something your contractor did and charged for anyway.
Navigating Your Contract
Most homeowners and contractors sign a legal contract for their specific arrangement’s terms and conditions. It generally includes:
- A description and clarification of the exact work that is completed.
- The amount of money that you will pay them for the work
- A time frame that sets a deadline for completion
You could sue your contractor if they didn’t comply with the contract– such as missing deadlines or not completing part of the project.
Other lawsuits typically happen when the work is not satisfactory compared to the original plan or the contractor violates local zoning ordinances or safety standards.
Your contract is the best place to learn whether or not filing a lawsuit is worth your time. If there is a clear breach, you could have a case for overcharging. Consulting with a lawyer can ensure you are reading the contract correctly and thoroughly to get the best potential answer.
How To Sue a Contractor Without a Written Contract
You can still sue a contractor without a written contract if you can argue that you both made an oral or implied contract. If you hire and pay a contractor to do an obvious task, such as painting your home, not painting it is a case of overcharging. It’s like a restaurant giving you half a portion when you paid for the full one and refusing to refund you the difference. It’s obvious who is in the wrong.
Another example is if you paid specifically for a wood privacy fence and they placed a plastic or chain link one instead. They added the fence, but it’s far from what you agreed on.
Going to Court
Most cases filed against a contractor will go to civil court to seek financial compensation for the overcharging and any other injustices against you. Only in extreme circumstances, would the case be eligible for a criminal investigation.
As the filer, you will need to provide the burden of proof that your contractor charged you too much for their services. Pictures, text messages, materials and other evidence can help you build a case. Consulting with a legal professional is recommended if you don’t have any experience with these types of cases.
Presenting Your Case
When you go in front of the court, you’ll need to have a solid case. When presenting your evidence, have information on the following:
- Your contract is valid via your state’s laws.
- That you upheld your end of the agreement and your contractor did not.
- They significantly breached the terms of the contract. It may not be worth the court’s time if there is a small typo or technical error.
- You can calculate the estimated compensation.
How Much You Could Win in an Overcharging Case
The amount you can earn depends on your damages your contractor caused. There are many potential amounts you could earn, including the following.
- Compensatory Damages: The most common form of damages you will receive in an overcharging case is compensation for the money they charged you. Also caused “actual damages,” these are the obvious reasons for the lawsuit.
- Incidental Damages: These damages cover the things you had to do to fix your contractor’s mistakes, such as purchase new equipment or hire another person to finish the job.
- Consequential Damages: These incidents are damages that happen due to the breach of contract, such as having to close down a business longer due to the poor work.
- Liquidated Damages: These damages only get awarded when the total damages acquired are too high to calculate.
Suing Your Contractor for Overcharging
When a contractor overcharges you for their services, you have a right to seek compensation. By reviewing your contract, getting legal counsel and putting together a solid case, you can get the money you deserve.