Would you hire a contractor only with a handshake?

[remagenman]

I have a buddy who is starting a remodel job on his new place in the tune of a couple of hundred thousand dollars with no contract and just the word of the contractor and his reputation.

Apparently this guy is established in the community but knowing that my buddy is too trusting this just seems a little sketchy with no contract. I mentioned a few scenarios were he can get screwed over without one but left at that after realizing whats done is done.

I would probably get a contract even if my brother was the contractor but is this a standard practice?

 

[racecougar]

No, that isn't a common or safe practice. Operating under a contract IS the standard practice, hence the title of General Contractor.

 

[readhead]

That is not wise. There should be at least a written scope of work that is agreed upon.

 

[240sxguy]

High five maybe, definitely not a handshake.

 

[BruceMc]

I did. It mostly worked out alright. I would never, ever do it again. Not for anything that requires plans and specs.

 

[p00p]

dinner & a movie at minimum when there's no written contract.

 

[Git]

A contract protects both parties. Without one, you would need to worry about suppliers filing a lien against the property if they did not get paid. For that kind of money -> a proper contract showing insurance and some sort of bond, payment schedule, etc and any 'change orders' would be in writing with prices before the change was implemented

 

[Leaflessshadetree]

An honest person will be honest with or without a contract. Others will screw you over with or without a contract.
The contract may help to avoid disagreements and misunderstandings even before they occur.

 

[stillnostrebor]

Not a chance... and I work for a contractor negotiating contracts.

30 years ago we did handshake work all the time. Those trustworthy customers are dead and gone. Modern customers require written agreements. We save a lot of hurt feelings, anger, pain, and suffering when we have things clearly defined in writing.

 

[b-boy]

He's nuts if he doesn't have a contract for a job that big.

You only really need the contract if you ever have to go to court. If you don't have it then, you're screwed, so I'd get one.

I've done it before, but for anything over a few hundred dollars, I wouldn't do it again.

I've had too many contractors ghost me halfway through the job.

As far as contracts go, the more detail the better. If it's not specifically referenced in the contract, you'll have little recourse if something goes wrong. So, a few sentences written on a cocktail napkin might be worse than a hand shake deal.

 

[haugy]

Your friend is an idiot. Don't let him be an idiot. Help him.

A $2,000 job, maybe. But anything over $10,000 better have a serious contract. Hundreds of thousands? Holy **** how can he not!??

Smack your friend, or distance yourself from him. If he won't listen to you, he is too stupid and you probably don't want to be associated with that.

 

[zmotorsports]

It depends. I had my 3k square foot shop built on a handshake once we came to an agreement. I also purchased our current coach on a handshake and was given a few days to have the check to the guy after he let me take it home and give it a full once over.

That being said, I knew both of these gentleman for many years and admire their ethics and integrity as well as there being mutual respect between us. I still do quite a lot of business with a handshake but I may be old fashioned where I think a man is only as good as his word (or handshake as a gesture).

For someone I am unfamiliar with or am familiar with but question their integrity then I would absolutely get it in writing once everything is agreed upon.

At work we don't do anything without a written scope of work and service contract. Anything over $100k will have to have full legal team review and sign off on as well as put in all of the legal terminology. And for the record, I HATE having to do contracts as part of my job. I never thought I would have to become familiar with legal terminology and review contracts when I first became a mechanic.

 

[duneslider]

I would bet the number of contractors not using contracts WAY out numbers those that do. In a lot of smaller areas (population size) if a contractor screws someone he is out of business because the community will shut them down.

A contractor that is dishonest will screw you with or without a contract and the only way to get recourse is through the joke of a legal system we have and in the end you still will probably lose because said contractor has no assets you can take from him for recourse.

I use contracts for most jobs and ask for them on most jobs mostly for the sake of clarity of scope of work going both directions.

If this contractor supplied a "quote", preferably in writing, and then proceeds with said job based off that "quote" that will serve as an implied contract in court and holds the same legal standing as a paper that says "contract" at the top.

 

[930dreamer]

A friend in Abq, NM is having a house built with a contract, it states built to industry standards. He told me today he can't believe how many fasteners have missed studs, rebar reinstalled in a hole full of concrete dust etc. Get it in writing.

 

[SALIV8]

Never. Always have a contract. If for nothing else, how on earth do you even get to claim losses when you sell without a contract? Or have it insured properly?

 

[bamawildcat]

Always have a contract. First question out of the mouth of any third party in the event of a dispute is "well, what does the contract say?"

 

[isb cornbinder]

My wife has used a contractor she knows well. He has worked for her a few times. They work out a contract that is little more than a list of to-do things, they both sign. He usually starts after a handshake. The biggest renovation was an open-end affair that ended up well over $200,000. The contractor finished within her budget and several weeks ahead of his estimate.

 

[dcg9381]

I have a buddy who is starting a remodel job on his new place in the tune of a couple of hundred thousand dollars with no contract and just the word of the contractor and his reputation.

Sorta. Here, general contractors are not licensed. A contract is a great idea, but most of these guys are "judgement proof" - meaning a contract isn't going to allow you to get a dime back from them if you get behind the ball.. I do quite a few "small" jobs as a consumer that are hand shakes and the only thing I require up front is an estimate and description of the work. But I *never* pre-pay and the work stage is always complete to my satisfaction before any payment is issued. If they need materials, I buy those direct up front.

Beyond that a contract for a job of even mid-sized is required. Why? Because you need to specify materials, sizes, agree to the scope of a job, specify payment terms (usually in stages complete). To sign for $100k+ without a contract is nuts to me...

A good friend who is a life-long GC/homebuider taught me that the contract is the "tie breaker" in a dispute and that details need to be there to sort out the possible issues that could come up. An example is I built a house using their R6 insulated panels. Our contract states "Exterior sheeting in Huber R6 panels installed per manufactures specifications and warrant-able terms" - that covers a ton of mistakes that they can make in installing those panels, from nail type, nail depth, to how the tape is installed and how the corners are cut. They screw it up and don't want to fix it, all I do is call the local Huber rep out to inspect the installation and make the call...

 

[glentre]

I've worked with GC's on several homes and projects but always with complete and detailed plans and written specifications on every phase of the project, reviewed, modified and agreed to by each party before signing. Works both ways..... if it's in the contract, the GC is responsible. If it's not, a change order covers it.

There are many threads on this forum on owners getting into trouble because they are not experienced with construction and have no written contract. This does not mean I distrust GC's......... I was a licensed general contractor myself. It's just a matter of proper communication between the two parties to avoid any honest confusion or misunderstandings regarding the details of the project.

Glen

 

[bczygan]

I would never have any work done without a detailed and specific contract.

I would never hire anyone who I would need a contract for.

Bill

 

[Bert_]

Maybe 1% of my work has a signed contract. I give estimates normally nothing more, often just a verbal estimate.

I don't think I've ever had a signed contract for residential work.

 

[joey1320]

I would advise your friend to have a contract.

 

[remagenman]

Maybe 1% of my work has a signed contract. I give estimates normally nothing more, often just a verbal estimate.

I don't think I've ever had a signed contract for residential work.

This is where my friend is at, he has no construction or heck, even DIY experience so I assume he just took the word of the contractor but he does have an architect that helped design the new layout.

I think he just stood back and let them hash out the details hoping it will all be good and unfortunately he could have shoddy work done with a layer of paint and he wont be the wiser.

I want to tell the couple all of the above comments without insulting them so I'll thread lightly.

 

[Muzzy]

Your friend would probably benefit from a written scope and contract, mostly so that he has the right expectations of the work, not because the team doing the work is shady.

In different circumstances, well if you can't trust the other person's handshake what makes you think that you can trust their contract? It will be a fight either way if one side goes back on their word.

 

[jd_1138]

Your friend would probably benefit from a written scope and contract, mostly so that he has the right expectations of the work, not because the team doing the work is shady.

In different circumstances, well if you can't trust the other person's handshake what makes you think that you can trust their contract? It will be a fight either way if one side goes back on their word.

But at least a contract is enforceable in court. lol. A handshake isn't. Now of course, if the contractor fesses up under oath in court that "um, yeah your honor, I did promise those things to him verbally" then the handshake is sorta enforceable. Verbal contract.

But if a contractor promises stuff verbally that he doesn't deliver and it ends up in court, obviously the contractor will most likely lie even under oath and say "I never promised those things."

Thus, a written contract is important.

 

[aggie113]

Contract didn't keep me from getting f'd over on my initial garage build. Handshake can't be much worse.

 

[klassenl]

There are definitely things I would do with a handshake.

A home renovation is something that has too many details to be done without some amount of paper trail. A full legal contract may not always be needed. But a certain amount of written agreement is wise.

I have been in the construction industry for some years. Around home I know who to trust. The guys I wouldn't trust with a handshake I wouldn't hire even with a full contract.

 

[egdede]

What's the payment schedule? 15 years ago OK'd a 17.5 k roof by text. Many Gables, dormers, steel slate-like product. The company started work. 1/2 way through the job the salesman showed up with a contract. Complete Payment when job complete. No deposit, nada. I had heard of these unicorn contractors before this, but had only encountered the ones who tried to get 1/2 up-front. The job went off without a hitch, and I paid when they were done.​

 

[quickfarms]

It all depends

I would contact some of his references to see if this is the way this contractor works.

Personally I have hired many contractors without a contract. These are people that come referred to me. I have only had issues with the ones that insisted on a contract.

In my business I do a lot of work for some very large companies without a contract because I have a relationship with them and these are the guys that pay the invoice in about 24 hours

 

[nadogail]

Even though we have known and respected each other for years, things should be written down so we don't forget what it was we agreed to.

 

[Vintage Veloce]

Contract or not, NEVER pay ahead of the work or material deliveries. (Besides a modest deposit, say $1000 or 10%, whichever is less. This is actually California law.)
But get a contract, if only to ensure the guy agrees to the job, completes the work and understands the payment schedule.

 

[zeke67]

Generally a contract is a good idea. That said, depends on the amount and depends how involved you can be or feel you need to be in the process. I've done several projects in the mid-five figure range without one, which I think is a lot and won;tend advise unless you know who you are dealing with and what you are doing. The guy I use here in Texas I've known for several years. I need to stay on top of him and he will head off to another job if there is money in it. Then again, so will a lot guys even if you have a contract in place. Yhe contract doesn't stop them from chasing the next dollar or prevent you from having to chase them down. The guy I use has been picked up a couple of colleagues and a friend, who in turn have sent other projects their way. So there is some relationship security if not legal backing. I did teach this guy to put into his contracts that he should ask for progress payments from time to time even while he doesn't do it with me. (I'd suggest you limit up front and progress payment charges even if your guy is asking for it in the contract.)

At the Minnesota cabin, I have a friend who is a contractor and we have never inked paper. Which is risky because it's a great way to wreck a friendship. On the other side of it, one of his subs took an issue with a poorly scanned copy of the sub contract inked by me and my buddy said "don't worry, he's good" (in reference to me being good for it) and the sub started work. The next project with that sub, after expelling what I wanted and by when, the sub looked at me and said let's start next week -- I instantly wrote him a cheque as progress payment on is rough verbal price quote. No contract, he did it for T&M and invoiced me under his verbal estimate. These are guys I know in a small community where reputations matter. Your results may vary. But, yes, you can get stuff done without a lot of paper work required.

 

[four.cycle]

I didn't read all the posts in this thread - just the OP's. My two cents:

One of my older sisters, by word of mouth, was referred to a man who was a contractor. Note the "was" - as in "used to be".
He had gotten out of the contracting business and had been working at Boeing for several years, but made a verbal agreement with my sister and brother-in-law to do some extensive modifications on their 1955-vintage house.

This man was highly recommended by friends and people she knew and trusted.

Eleven months later the work had still not yet been completed, and the work that had been completed wasn't really "completed".
Finish work was half-assed together. Many things simply weren't "done".
He bumped a rented Bobcat into an exterior brick partition wall and caused the interior wall to crack along its entire length. The doorway between the garage and storage room wasn't trimmed out. He left truckloads of construction debris out at the end of their driveway, which I eventually ended up hauling off. There isn't enough space here to list all the stuff he didn't do.

After the involvement of an attorney, which went into some sort of "arbitration" fiasco, they ended up paying the sonofabitch off just to get rid of him. He never did complete the job.

Two years later, as I have time available, I'm still driving over there to fix little odds and ends he left undone.

Get a contract. With a signature. A legal, binding, contract.

 

[mmb617]

It would be my guess that a contractor who conducts business with only a handshake will be one of two things.

He may be an old fashioned man, honest and reliable as the day is long.

Or he may be a dishonest man who preys on trusting people.

Unfortunately the odds favor him being the latter.

 

[denis4x4]

We have done new home construction and remodels in the low six figure area and prefer time and materials and we generally pay the subs directly. Colorado does not have a contractor licensing requirement.

 

[NoMoreGreen]

I agree with what most have said. I very rarely have work done without a contract.

My tile guy we don’t do contracts. We agree on cost per sqft + materials. At the end of the day he gets paid in cash for what’s done. Multi day jobs he still gets paid at the end of each day. Often I end up with excess materials in my garage that I paid for and he left behind.

I had a situation where I needed a roof repair, I had 3 roofers come out and quote 25k plus but they were all similar in price. The fourth guy? He came out and said “I can fix it, I’ll be right back.” He climbed on the roof worked for about 90 minutes came down and said “that’ll be $175.” I didn’t know what to do so I handed him 2 $100 bills and said keep the change. Called another roofer to come inspect my roof and he said everything was good to go.

Sometimes it works out, but as a standard practice demand a detailed contract. Most are happy to provide and I don’t hire those who aren’t. I certainly would not accept a contractor who wouldn’t provide a contract once we start talking more then a couple thousand.

NMG


Sent from my iPhone using Garage Journal

 

[nikerret]

I do SMALL construction/big landscaping type stuff. If it’s only a few hundred, I’ll do it on weird. If I bid at or over $1,000, I have a contract and take money down. This solves a lot of problems, before they start.

 

[jblnut]

I've spend a A LOT in buildings/dirtwork/utilities with handshakes around here and have literally never had an issue

I'll give a down payment to the local lumber yard for anything they need to special order but nothing else. I'll never ever pay a contractor for labor ahead of the work. Even though the guy that has built most of my stuff is a HIGHLY respected contractor in the area I still won't pay him ahead and he'll never ask to be paid ahead. When we did the shop I told him to text me Thursday evening what he needed for the week and I'd leave a check on his skid steer seat for the last Friday-Thursday.

I've never actually dealt with a contractor that has asked for money ahead of the work being done. That was a totally foreign concept to me until I started reading about it on this forum.

 

[theoldwizard1]

I am the crazy guy who adds amendments to the contract. Penalties for late start or late completion.

I will even write down things that were verbally agreed to ("we do that all of the time").

 

[Pntyrmvr]

So how do you react when the lead of your framing subcontractor gets a bad load of sciatica? He's worked with you for ten years and can't even suggest a substitute. Everyone is busy.

You've broken bread with him, know his wife's name, and been to his kid's christening.

At some point small business relationships are more like family and you want to invoke pure mega corporate clauses.

Not happening.

Stay on Wall street.