The Court of Appeals of Michigan recently ruled on a case which should encourage caution for anyone entering a contract in which all of the terms are not clearly stated. In J & N Koets, Inc. v. OneMarket Properties Lake Pointe, LLC, a condominium complex manager signed a work authorization for a water restoration company to tend to burst pipes. No quote or estimate was given and the work was performed. The complex manager subsequently received an invoice totaling over $120,000 plus a 2% monthly service charge if not paid within the first 30 days. Lake Point Condos refused to pay and J & N Koets sued.
The name of the water restoration company differed from the name on the work authorization. The condo complex argued that J & N Koets could not sue for the invoice amount because the heading on the form read as “Advanced Restorations, Inc.” (J & N Koets’ former name). Lake Pointe also argued that since the manager was not aware of the precise identity of the water restoration company, it should not be bound by the work authorization.
The Court of Appeals ruled that despite the use of differing names, Lake Pointe’s manager manifested intent to be bound by the agreement by signing it. And, although the agreement did not contain any estimate or rate of labor, it did state that the condominium complex would pay “any and all charges” upon completion of the work. The Court of Appeals found in favor of J & N Koets, stating that “a contract may be enforced despite some terms being incomplete or indefinite so long as the parties intended to be bound by the agreement. Because the parties intended to be bound by the contract, Lake Pointe was required to pay over $340,000.
The lesson to be learned is that the terms of a contract should be negotiated and clearly stated in writing prior to performance whenever possible. If an estimate for the price of service or a quote for the hourly billing rate had been negotiated and contained in the work authorization, the conflict in this case may have been avoided altogether, saving both parties the time, money, and frustration involved with litigation.
Summarily, if at all unsure about the validity or clarity of contract for service, it is always best to contact an attorney who specializes in business matters. It will assuredly be quicker and cheaper than allowing the matter to be resolved in litigation.
This blog was written by law clerk Tyler Kemper.
