Legal Question in Business Law in California

As a contractor, I entered into a home improvement contract with my client, The contract was sign, and I worked past the 3 day right to cancel. The client decided to cancel out after one week 5 days of working. Can I sue for breach of contract? can I file a mechanics lean on his property? for my potential profit at a certain %?

Asked on 12/14/15, 7:36 pm

1 Answer from Attorneys

Jeannette Darrow Jeannette C.C. Darrow, Attorney at Law

Without seeing your contract and knowing all of the circumstances, and just going off of the information you provided, it does sound like a breach of contract. Profits may or may not be awarded by a court in a breach of contract lawsuit.

You can record a mechanic's lien for the amount of work you've performed and materials you've provided, and if you are not paid and you need to file a lawsuit to enforce your lien, you can include a claim in the lawsuit for breach of contract as well (among other things).

Depending on the amount of your claim, in determining whether to record a mechanic's lien, you'll want to take into consideration that a mechanic's lien cannot be enforced in small claims court. If your monetary claim is worth $5,000 or less if you are a corporation or LLC, or $10,000 if you are doing business as an individual, it sometimes doesn't make sense to record a mechanic's lien instead of just filing a small claims lawsuit. Of course, you could always just record the lien to see if it gets you paid, and if not, release it later and pursue a lawsuit without it. If your claim exceeds the small claims limit, it most likely makes sense to record a mechanic's lien.

Be aware that there are many rules that protect homeowners, even if you believe you've done everything right. For example, if you do not have workers' compensation insurance, but had laborers (without their own licenses) working on the job, you could be deemed unlicensed and not entitled to get paid at all. It is best to consult with a construction attorney beforehand to make sure that you aren't getting into a situation worse than non-payment. I have seen so many contractor versus homeowner cases go 'sideways' because the homeowners almost always defend their refusal to pay by arguing that the contractor's work was deficient and that repairs will exceed any amount the contractor asks for. The homeowners also have leverage with their ability to make claims to your license bond and the CSLB, even if the claims are later denied. In other words, you have to choose your battles.

Good luck!

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Answered on 12/14/15, 8:56 pm

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