By Quenda Behler
You're a general contractor building an addition for a
property owner. Not long after the addition is framed and
drywalled, the property owner says, "Hey, an uncle of mine is
in the hardwood flooring business, and he'll install the
prefinished flooring for half the money you're charging me."
What do you do?
Legally speaking, you're the G.C., and you don't have to let
the uncle do anything. After all, you have the contract for the
work, and it doesn't include the uncle. But you want to be a
nice guy, so you allow the uncle to do the work. After the
floor is in, the owner asks, "What are you going to do about
all those dings in the baseboard and scratched pieces of
flooring?" You point out that the uncle dinged the trim and
made the scratches. It's the uncle's responsibility to fix
An Unintended Contract
The good news is that it is indeed the uncle's responsibility.
The bad news is that it's also your responsibility. You can ask
him to fix his work, you can even sue him, but legally
speaking, the uncle is your subcontractor because you allowed
him to do work that you contracted to do. By allowing him to do
work that's in your contract you've created a contractual
relationship with him. It doesn't matter that you didn't intend
to make him your sub and didn't put anything in writing.
Legally, he's your sub, so if he does something wrong, you're
ultimately responsible for fixing it.
(It would be different if the scope of work in your contract
didn't include the floor. Then, if the uncle did the floor, he
would not be doing work that was in your contract. Fixing those
dings and scratches would not be your responsibility because
the only contractual relationship would be between the owner
and his uncle.)
There are other ways this arrangement with the uncle can go
wrong. Suppose the uncle shows up a week late and delays the
completion of the job. If he's your subcontractor, the delay is
Or suppose it's time to settle up, and the owner says, "Let's
see, I paid my uncle directly. The floor was about 30% of the
job, so that means I only owe you 70% of the contract price."
You respond by saying, "Hey, that floor didn't amount to 30%,
and what about my overhead costs? Besides, you didn't pay 30%
of the contract price to your uncle. You paid him less than
what I was going to charge."
What's the answer? Unfortunately, I don't have one. If you
didn't work this out before you let the uncle on site, you
opened yourself up to the possibility of a lot of bad outcomes.
What you can collect will depend on the owner's good will, the
kind of payment terms you had in your contract, and how
sympathetic a judge or arbitrator will be.
Suppose you want to accommodate the owner's request, but want
to make sure you're protected as well. Here's what you could do
in this situation. If the conversation about the uncle takes
place before you sign the contract, include a clause that sets
up the deductions the owner will get from the contract price if
he supplies his own tradespeople. The contract should also
include language that says the owner's tradespeople are not
your subs. They work for the owner, and your only relationship
with them is as the owner's agent. As the owner's agent, it's
your job to supervise the tradespeople for the owner, but you
do not have a contractor-subcontractor relationship with them.
Don't forget to charge a fee for acting as the owner's
If you have already signed the contract when the property
owner says he wants to bring in his relatives, write a change
order that establishes any change in your contract price. The
change order should include language that says the property
owner, not you, is contracting with the tradespeople. The
change order could also state that to the extent that you have
any relationship to the tradespeople at all, it's as the
owner's agent. This way, if the uncle does something that
causes delay or damage to the property, it's legally the same
as if the owner caused the damage or delay himself. If you
can't finish by the contract completion date because the owner
brought in his deadbeat uncle, it's the owner's problem, not
yours. What's more, if you suffer additional costs because of
the uncle, you can recover those costs from the owner.
Safety Your Responsibility
Even with this protection, certain legal obligations will
always remain, no matter who brings the tradespeople onto the
job. You will still have a legal duty to maintain a safe job
site so that the uncle doesn't get hurt. You also have a duty
to supervise him and see to it that he doesn't hurt anybody
has practiced and taught law for over 25
years and is the author ofThe
Contractor's Plain-English Legal Guide(www.craftsman-book.com).