Legal Question in Business Law in California

I am a contractor. I signed into a contract with a customer in May of this year for the installation of carpet. I received a deposit for approx. one thousand dollars. I was to begin once the tile work from a separate contractor was completed. I have learned that the reason the tile work is not done is because the customer is a pain. I have returned her deposit, and said I do not want to perform. The customer has threatened legal action. I feel that her claim does not hold water because of the lapse of time. There was no time specified in the contract apart from the verbal understanding that my employees would begin once the tile work was done. Is there a likely defense in the lapse of reasonable time to perform? The customer has essentially not allowed to start in over five months, and if we had not returned her deposit, we would still be waiting to start


Asked on 10/26/11, 7:34 pm

1 Answer from Attorneys

Well you have a Business and Professions Code violation in your conduct from the start, since your deposit is limited to $500 or 10% whichever is less. So you're starting with a strike against you. On the bright side, where no time for commencement of a job is stated, a "reasonable" time is implied, as is an implied covenant of good faith and fair dealing. On the dark side, you have remedies for owner-caused delays under construction law that are short of cancelling the contract, and the carpenter's conduct is not the owner's bad faith or unfair dealing. The bottom line is that you can claim an equitable right of rescission due to the delay, and you have preserved that right by tendering the deposit back. However, all equitable claims are decided based on what the court finds is fair. So both you and the owner are taking your chances if this goes to court. So I would strongly recommend that the two of you work out either a change in the order of the work so you can start sooner, or a drop-dead start date that if missed will allow you to withdraw from the job, or would allow you a specified delay payment for each day past that date your start is delayed.

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Answered on 10/26/11, 10:11 pm


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