Lack of Clear Terms in Written Contract Lead to Construction Litigation

Cases Highlight Importance of Clear Terms in a Written Contract

We had previously reviewed a case in which an Alberta company saw its fees cut in half because it did not have a written contract in place.

More recently, as seen below, an Alberta court faced a similar issue, in which work billed by a contractor that was not specifically covered in the written contract was contested in court.

Homeowner Hires Contractor For Construction Project

A contractor and a homeowner entered into an initial written contract in May 2019. The homeowner had hired the contractor to renovate his basement for a total amount of $46,000.

A dispute arose, however, over an electrician’s bill in the amount of $680 that the contractor had paid and wanted the homeowner to cover. The electrician’s work covered the connection of a light upstairs, a fan upstairs and a fan in the basement.

The problem was that, while the work on the downstairs fan was covered by the contractor’s original quote, the work on the upstairs fan and light was not. As such, the work performed on the upstairs light and upstairs fan was extra to the original quote.

The homeowner and his wife argued that they were already well over budget and would not have agreed to the upstairs fan if they had known about the cost of the electrician.

Homeowner Files Counterclaim Against Contractor 

In response to the contractor’s claim against him for the electrician’s bill, the homeowner filed a counterclaim alleging that the work performed by the contactor on the tiling in the shower, the window sills in the basement and the basement flooring was substandard and needed fixing. He claimed $2,988 in damages plus $400 for permits that were necessary for the renovation.

Court Rules Against Contractor Based on Written Contract

At the outset, the court commented on the nature of the litigation, stating:

“This is another case in which previously amicable relations between a contractor and a homeowner fall apart due to miscommunication and anger.”

Turning to the issue at hand, the court ruled in favour of the homeowner and admonished the contractor, stating:

“In this case, the [contractor] is a professional with many years of experience.  He should have been aware at the outset of the cost of the electrician and ensured that the [homeowner] was aware of this. Since he did not, he should not be entitled to now claim this. As such, I rule that he is not entitled to recoup any of the $680.”

Court Rules in Favour of Homeowner

With regard to the counterclaim, the court surveyed the evidence presented and found that the homeowner had not presented sufficient proof of a problem with the tiling in the shower and refused to award damages on this point.

Further, the court rejected the homeowner’s claim relating to issues with the windowsills, finding there was insufficient evidence to prove the claim.

However, the court found sufficient evidence that the contractor had covered a drain with flooring, which would result in damage if access was required to the drain. On this point, the court awarded the homeowner damages of $250 plus GST.

Finally, the court found that permits were needed, contrary to the contractor’s assertion, and ruled that the parties should split the cost at $200 each.

In the result, the court therefore dismissed the contractor’s claim and awarded damages to the homeowner as set out above.

However, because the homeowner admitted to still owing the contractor $3,909 in fees, the court ordered him to pay the contractor his unpaid fees, minus the award for the flooring and the $200 for half of the permits.

Get Advice

The knowledgeable Calgary construction lawyers and staff at DBH Law understand the complex risks of both multimillion-dollar and smaller construction projects and the expensive disputes that can arise when something goes wrong in all cases. We handle all elements of a construction relationship. We can proactively advise and help draft important documents such as contractor and subcontractor agreements and similar, to make expectations clear and eliminate as much risk as possible. We can also represent you in any litigation or other dispute resolution that may be needed if a dispute arises.

The team of professional and experienced construction lawyers at DBH Law have the experience and technical knowledge to provide you with the legal advice needed in the modern construction industry. We understand the number of moving pieces involved in construction projects and work tirelessly to resolve issues quickly. Contact us online or by phone at 403.252.9937 to discover how we can help you today.