You are a high-end remodeling contractor and are about 80% complete on a whole house remodel for Mr. and Mrs. C. W. Order. The original sales price for the work was $383,957.
The job had a good set of plans up front, but the owners were reluctant to make final design decisions on some issues until they could physically see how the changes were shaping up, so the plans were left incomplete. Along with the incomplete design and plans, they didn’t make all the selections for the job before you got started.
To date, they have requested 14 changes with a total sales price of $93,745.
The changes and the quote for each are as follows:
| 1. | Extend the master bedroom closet into the bedroom area 2 feet. | $ 1,469 |
| 2. | Change color of the fixtures in the master bath from white to ivory | $ 473 |
| 3. | Enlarge width of bay window in the living room from 6 feet to 8 feet | $ 4,775 |
| 4. | Change the existing carpeted floor in the living room to bamboo | $14,193 |
| 5. | Add insulation to the existing attic space, 2800 SF | $ 2,800 |
| 6. | Add a 8′ x 14’deck and stairway off the second floor SW bedroom | $10,457 |
| 7. | Finalized the change out 6 windows on the second floor | $ 5,837 |
| 8. | Add four new skylights in the four bedrooms on the second floor | $ 3,993 |
| 9. | Replaced four entry doors on the first floor | $ 4,739 |
| 10. | Replaced the boiler in the mechanical room | $ 7,647 |
| 11. | Finalized the tub/shower combination in the guest bath | $ 2,533 |
| 12. | Finalized the sound system in the second floor home theater | $12,793 |
| 13. | Finalized the appliances in the new kitchen, changed brand and color | $ 9,927 |
| 14. | Finalized the new kitchen cabinet door styles and pulls | $12,109 |
Total Changes to date $93,745
Mr. and Mrs. Order have argued that the last four change work orders weren’t really changes, but were simply final decisions on the work to be done. Those change work orders still aren’t signed. Their argument is that you should finish those things as part of the original agreement at no additional charge.
Last week, they asked for an itemization of everything on the change work orders and now, this morning, Mrs. Order notified you by e-mail that she wants itemization on the entire job. She stated that if you don’t comply within 24 hours, she is going to turn the whole matter over to her attorney and start litigation for breach of contract, price gouging and violation of the rule of good faith and fair dealing.
Two Questions:
A. List the mistakes that have been made to date by your company that have got you into this predicament.
B. Briefly list the paragraphs of contract language that should be included in your original contract to address these problems.