Q: Advice needed on contractor breach and arbitration in a fixed-price renovation contract in Florida.
I have a fixed-price construction contract in Florida for a $78K renovation. We signed it several months ago, and permits were just obtained three weeks ago. Now, the contractor demands an additional $22K due to increased subcontractor costs and refuses to proceed unless I agree, despite the contract stating the price is fixed and changes are only allowed through a mutually agreed-upon change order. We've had negotiations through texts and phone calls.
The contract mandates binding arbitration with the American Arbitration Association, and we have not yet consulted an attorney. Given the 13-week timeline, we are currently in week 3, and the contract includes a $1000 compensation for each week of delay.
I need advice on:
1. Does the contractor’s refusal to proceed at the fixed price constitute a material breach under Florida law?
2. What compensation could I seek if I terminate the contract concerning costs for hiring a new contractor and project delays?
3. Should I hire an attorney for arbitration, or can I effectively represent myself?
4. What immediate actions should I take to preserve my rights and ensure the renovation moves forward, whether with this contractor or another?
A:
1. Does the contractor’s refusal to proceed at the fixed price constitute a material breach under Florida law? It may, as you mentioned the price is fixed. However, the contract may contain exclusions or exceptions. The terms of the contract would have to be reviewed.
2. What compensation could I seek if I terminate the contract concerning costs for hiring a new contractor and project delays? The primary damages you would be entitled to are compensatory damages which are the most common and are meant to put the homeowner in the position they would have been in if the contract had been properly fulfilled. Thus, anything in excess of the contract price to complete the job would be part of your damages that you would be entitled to. You could also be entitled to incidental damages. These include costs incurred by the homeowner as a result of the breach, such as storage fees, temporary housing, or additional inspection costs. You may also be entitled to attorneys fees and costs if it is written into the contract.
3. Should I hire an attorney for arbitration, or can I effectively represent myself? You should hire an attorney. There is some complexity to the dispute that would likely require an attorney such as contract interpretation, Florida 558 requirements, and rules of arbitration.
4. What immediate actions should I take to preserve my rights and ensure the renovation moves forward, whether with this contractor or another? Preserve all communication and make sure to mitigate damages as much as possible. Reach out to the contractor and make every effort to get the job done under the terms of the contract.
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