# Can you believe I am being sued for making a profit.



## Ricky1765 (Nov 20, 2008)

I quoted an home owner a price on a HVAC system. He agreed to the price, but because of past experience with him I told him that I would need the payment up front, so he gave me a check for the full amount.
I ordered the equipment and had it dropped shipped to him. A week after I completed the installation he calls me and tells me that when the equipment was delivered the driver left the shipping papers with the prices of the equipment on them. Now I am being sued for over charging for HVAC equipment. If he get what he is suing for it will cost me $90.00 to sale and install this equipment to him. Any comments will be appreciated.


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## mdshunk (Mar 13, 2005)

If you have a signed contract with him, he doesn't have a leg to stand on. If you installed what the contract called for, at the price agreed upon, he owes you. The judge will slap it to him hard.


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## rbsremodeling (Nov 12, 2007)

Ricky1765 said:


> I quoted an home owner a price on a HVAC system. He agreed to the price, but because of past experience with him I told him that I would need the payment up front, so he gave me a check for the full amount.
> I ordered the equipment and had it dropped shipped to him. A week after I competed the installation he calls me and tells me that when the equipment was delivered the driver left the shipping papers with the prices of the equipment on them. Now I am being sued for over charging for HVAC equipment. If he get what he is suing for it will cost me $90.00 to sale and install this equipment to him. Any comments will be appreciated.



One you or someone that works with you should have been there for the delivery.

Second the shipper should not have put pricing on a delivery ticket.

Third the homeowner is an ass

Fourth I bet that won't happen again


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## Celtic (May 23, 2007)

Just because you are being sued is no reason to get excited:
Anyone can sue anyone, for anything, at anytime. [well almost...see below]

Winning is another matter :shifty:

As a contractor, you are entitled to make a profit....as well as get paid for the installation.

Have all your paperwork in order and relax.



[Forget about counter-suing him for lost wages while you presence is requested by the courts ~ "That's the price of being in business" is the judges standard response before slamming the gavel and announcing "DISMISSED"]


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## AtlanticWBConst (Mar 29, 2006)

rbsremodeling said:


> One you or someone that works with you should have been there for the delivery.
> 
> Second the shipper should not have put pricing on a delivery ticket.
> 
> ...



Yes

Yes

Yes

-You read my mind.... Especially number 3. Let the dope waste his time and money....you have a signed contract.

Do you think a guy can go and buy a new car off the lot, then go to another lot later on, findthe same car for less, and get the difference back? NO..

Caveat Emptor (sp) = It's called - Buyer beware. 

The guy is an ass and a dreamer....


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## GregS (Oct 1, 2006)

Tell him those prices were the shipping costs per item..

But ya, good luck to him. No idea how this guy would have found a lawyer willing to sue you for that.


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## ProWallGuy (Oct 17, 2003)

I see no where in the OP about a signed contract. He says they "agreed upon price". I bet a dollar there was no signed contract. :shifty:


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## mahlere (Aug 6, 2006)

ProWallGuy said:


> I see no where in the OP about a signed contract. He says they "agreed upon price". I bet a dollar there was no signed contract. :shifty:


i'll bet ya $10 that you are correct...


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## Celtic (May 23, 2007)

BuildingHomes said:


> But ya, good luck to him. No idea how this guy would have found a lawyer willing to sue you for that.


Lawyers are for schmucks! 












> *Small Claims Court: Taking the Law into Your Own Hands*
> 
> 
> _Small claims court_ is a do-it-yourself court where ordinary people, including businesses, can act as their own attorneys and where paperwork and legal mumbo jumbo are kept to a minimum. The court is a quick and inexpensive way to resolve relatively simple, non-criminal matters. Cases heard in small claims court commonly involve problems relating to car repair, property damage, small business issues, and landlord-tenant disputes. In the vast majority of states, a judge, not a jury, hears your case.


Like my avatar shows ~ No BS, this is for real....
http://www.dummies.com/WileyCDA/Dum...king-the-Law-into-Your-Own-Hands.id-3255.html


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## fireguy (Oct 29, 2006)

Filthy capitalist, you should willingly give all of your ill-gotten gains to those who are less fortunate than you are. Share the wealth! We are lucky to have a President-Elect who will help you share with the less fortunate.


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## orange Garrison (Nov 8, 2008)

It sucks when it happens but ,contract, contract, contract! hope this one works out for you! live and learn, that's what we are here for!!!


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## Fla Air Temp (Mar 31, 2008)

You and the customer entered into a verbal contract. He wrote you a check for that contract. There is not a lawyer dumb enough to take that case. Be good


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## klucrezi (Mar 11, 2008)

Was the mark up reasonable? For example. I am loking at adding a new product to my business. I sell whole sale 30% over cost to manufacture. The retailer gets 80% over that cost. They sell like crazy. So as a retailer, you are entitled to a mark up to cover all your costs plus. Thats how it works. By the way, what does or did the homeowner do for a living. Why is is the perople we work for most of whom in my case make 6 digits or more a year seem to want to chisel every chance they get. Hey, I like to keep my kids in Nikes too.


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## Dr Heat (Dec 25, 2008)

ok my two cents
I was sued by a developer. I won the court case and still (4 months latter) have no money for my struggle.

You can higher an attorney to represent you for any thing you are willing to pay for. The judge may throw it out but by then its already cost you something to defend yourself.

If you are incorporated you must higher an attorney to represent you even in small claims court if you are the plaintiff. You may defend yourself without an attorney


fyi
Illinois law says if you are working for the home owner or at a residential location and the work will cost more than 1000 you must get a signed contract.


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## CNC (Mar 29, 2006)

Ricky1765 said:


> I quoted an home owner a price on a HVAC system. He agreed to the price, but because of past experience with him I told him that I would need the payment up front, so he gave me a check for the full amount.
> I ordered the equipment and had it dropped shipped to him. A week after I completed the installation he calls me and tells me that when the equipment was delivered the driver left the shipping papers with the prices of the equipment on them. Now I am being sued for over charging for HVAC equipment. If he get what he is suing for it will cost me $90.00 to sale and install this equipment to him. Any comments will be appreciated.


you DO have a signed contract right?


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## Burby (Nov 25, 2008)

the nice thing, if he does sue you is, 10 to 1 you will win, and more so than not, you will not have to warranty the install. To prevent further disputes, in equity courts anyhow, Contractor winning, the judge makes it a part of the order to prevent further disputes. :thumbup:

You take a tongue lashing from the judge for conducting buiness as this. you should have had a worker there for the delivery as well as select better companies to conduct business with. That supply house is one you should be speaking with first. 
Alot of my suppliers I still use for the bit of work I do as well as use to, even when my guys picked up materials for me, the yards would not give them a copy with prices on them, as well as with drops offs, slips on site but no prices are on the slips left. 

As you mentioned, because of past problems with this homeowner you asked for payment in full up front. 
The price should have been higher than all others you charge, a way of politly saying thanks for calling, but no thanks for your business.
Additionally for the same reason, not to have a worker on site for delivery, was asking for the problems you do have. 

And again, it is "if" he does sue.


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## bob_cntrctr (Jan 30, 2008)

Well, wait - what did you sell him? Is it possible he thought you quoted him the furnace at cost plus labour to install, then he find out what you billed him isn't cost at all?


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## bwalley (Jan 7, 2009)

Ricky1765 said:


> I quoted an home owner a price on a HVAC system. He agreed to the price, but because of past experience with him I told him that I would need the payment up front, so he gave me a check for the full amount.
> I ordered the equipment and had it dropped shipped to him. A week after I completed the installation he calls me and tells me that when the equipment was delivered the driver left the shipping papers with the prices of the equipment on them. Now I am being sued for over charging for HVAC equipment. If he get what he is suing for it will cost me $90.00 to sale and install this equipment to him. Any comments will be appreciated.


Since you had a bad experience with the guy in the past, why would you even consider doing any work for him again?

I hope you have a written contract, but even if you don't the check he wrote you should be sufficient to prove the contract amount.

The judge knows a contractor makes a profit on jobs they do, otherwise they wouldn't be in business.

What state are you located in?

Are you properly licensed?

If you are in Florida and are not properly licensed, the client can not be forced to fullfil their part of the contract and the unlicensed contractor has no lien rights and can not sue the client, and can be held liable for 3 times the damages (cost of the contract plus any remedy required to remedy the situation).


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## D.Foster (Sep 13, 2008)

You are the Retailer, the Supply house is the whole saler. Retail always marks up. Am i wrong?


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## ccarlisle (Nov 9, 2007)

In the lawsuit he's bringing against you, just what law does he claim you are breaking in order to bring the Justice system into the picture? :blink:


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## Brock (Dec 16, 2007)

*FASTEN YOUR SEATBELTS BOYS*

Many of you fine construction gurus have flamed me for my "no mark-up" business model. 

Hate to say I told you so.....but this is a prime example of how things can go south. If I bid this job it would be COD for delivery. The homeowner gets my discount passed on to him. The only money I receive is for my time to install the unit. I set my price to receive what I need for my time. That price has the profit margin and overhead figured into it. The customer decides if he likes my hourly wage "before" I do the work.

I know all of you think I'm crazy, but this method has worked wonders for me for the last 20 plus years and it would have caused this particular job to go off with nothing more than a thankyou and a handshake at the end.


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## Dr Heat (Dec 25, 2008)

Brock said:


> *FASTEN YOUR SEATBELTS BOYS*
> 
> Many of you fine construction gurus have flamed me for my "no mark-up" business model.
> 
> ...


Sure but do you give a warranty? How do you pay for advertising? How do you pay for your showroom office fabrication shop tools ....... 

If I do the math correctly _would need to charge about 350 an hour for a two man team to cover a normal furnace install (I'm not getting rich so I am not overcharging). Remember we are talking about a highly competitive market with long held traditions of markup. In reality your method opens the door to all the guys who cant get dealer certification _


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## Brock (Dec 16, 2007)

Dr Heat said:


> Sure but do you give a warranty? How do you pay for advertising? How do you pay for your showroom office fabrication shop tools .......
> 
> If I do the math correctly _would need to charge about 350 an hour for a two man team to cover a normal furnace install (I'm not getting rich so I am not overcharging). Remember we are talking about a highly competitive market with long held traditions of markup. In reality your method opens the door to all the guys who cant get dealer certification _


warranty is manufuc warranty and 1 year on workmanship. all your other items are figured in to the hrly rate. I have about a 70% closing rate.


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## mahlere (Aug 6, 2006)

simpler solution is to not have your pricing on the shipping ticket...


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## Dr Heat (Dec 25, 2008)

Brock said:


> warranty is manufuc warranty and 1 year on workmanship. all your other items are figured in to the hrly rate. I have about a 70% closing rate.


I do not know what you specialize in. I have been in HVAC for 28 years. We cover 1 year on new installs and have to provide labor on most manufacturing defects. 
Also no reputable wholesaler will sell direct to a customer. You need EPA certification.


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## rbsremodeling (Nov 12, 2007)

There are other contractors and handymen that use the method Brock uses and are just as successful as the ones that markup across the board.

The closest systemized use of this system I have found is called capacity based mark up


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## Brock (Dec 16, 2007)

rbsremodeling said:


> There are other contractors and handymen that use the method Brock uses and are just as successful as the ones that markup across the board.
> 
> The closest systemized use of this system I have found is called capacity based mark up


I don't know what you call it but I can tell you why I do it. It all started when I got my drivers licsense in 1978. I bought a junker car and had an even junkier job. Whenever I would take the car to the mechanic he would mark up the parts. I would call the parts store and could get the part 60-70% cheaper than what he was reselling it for. He ofcourse would not let me buy the part and bring it in with the car. Needless to say I became my own mechanic from a very young age. Once I started my own business I knew I could never operate like that so I developed my own system. I need "x" amount per day for P/O. I estimate the jobs by this figure. I know I will have to run to the store a few times, parts and materials aren't going to just appear out of nowhere. I figure that drive time into my time estimate. It's not rocket science. It's the opposite. Easy. Plus I occaisionally check myself to see if I am still competetive. For example had a guy ask for a privacy fence the other day. I normally don't do fencing. I figured materials I needed and my time multiplied by my current"x" amount and it came to $27.00 per foot. I called 4 fence companies and all of them ranged from 25-30 per foot. I also ask to see the other estimates when I win a bid and sometimes (not very often though) they give them to me. That also helps me to determine the magic labor rate each year.

Now the Dr. Heat guy probably has a very low rate because he retails his parts. I give away my parts but have what some might say is a very high rate. Who is right who is wrong? I don't know. I just know my system works for me.


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## Dr Heat (Dec 25, 2008)

Brock I am interested to know because as you said it works for you.

I buy bulk parts, at the beginning of a season it cost front money but at times I can save 50% or more by buying case lots or pallets. Now the question is how do you handle that?


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## Brock (Dec 16, 2007)

Dr Heat said:


> Brock I am interested to know because as you said it works for you.
> 
> I buy bulk parts, at the beginning of a season it cost front money but at times I can save 50% or more by buying case lots or pallets. Now the question is how do you handle that?


 
No you are a retailer. You inventory supplies. Then you resale them.You have to mark up. That would be comparing apples to oranges. You have no choice.

I never inventory anything. Not even nails. I have no warehouse. I don't store anything. I build a deck,call the lumberyard and whalaa the deck is delivered. That is why my model will not work for anyone that stock parts in a delivery truck or warehouse.


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## Dr Heat (Dec 25, 2008)

Brock said:


> No you are a retailer. You inventory supplies. Then you resale them.You have to mark up. That would be comparing apples to oranges. You have no choice.
> 
> I never inventory anything. Not even nails. I have no warehouse. I don't store anything. I build a deck,call the lumberyard and whalaa the deck is delivered. That is why my model will not work for anyone that stock parts in a delivery truck or warehouse.


Nice! that would never work in HVAC though we buy everything from wholesalers pain in the A**:whistling


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## 747 (Jan 21, 2005)

Ricky1765 said:


> If he get what he is suing for it will cost me $90.00 to sale and install this equipment to him. Any comments will be appreciated.



Counter sue. Your entitled to fair market value for your services. Thats not it. The judge doesn't expect anybody to work for free. Actually i can hear the judge really giving it to this guy.


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