Are Many Restoration Contracts Unenforceable Because They Lack a Specific Price and Scope of Work?

Insurance restoration contractors have a lot on their plate. They are not building based on new plans but repairing already-built structures. Many of the damages are hidden, and the party whom everybody is counting on to finance the repair, the insurance company, is often not in a position to approve or promise any reconstruction project when the restoration contractor is hired or ready to start the project.

As a result, the vast majority of insurance restoration contracts are written with a vague indication of the scope of the work and the ultimate price that is going to be paid. The problem is that many of these typical restoration contracts may not hold up in court if challenged.

This was the case in a recent Florida case where the court made this ruling: 1

The two counts of the Complaint for enforcement of the construction lien (Count I) and breach of contract (Count II) rely on the viability of the Customer/Contractor Agreement Contract attached to it, and the Court finds that this purported contract is unenforceable per the authority of The Gables 1 Townhouses, Inc. v. Sunmark Restoration, Inc., 687 So.2d 6 (Fla. 3d DCA 1996). No price or specific scope of work is listed in the Customer/Contractor Agreement, rendering it illusory.

My first suggestion to all insurance restoration contractors is to obtain a detailed review of your construction contracts with a very qualified construction attorney who specializes in construction contracts. Many construction contracts must comply with specific state regulations, which are highly technical and must be found in the contract to have a legally binding contract.

This case is not over. The roofing contractor filed a motion for reconsideration. For those who are interested in this matter and wish to study the complaint and attached construction contracts, I am enclosing those as well.

The lesson for everybody is that written contracts need to comply with state-specific requirements to make certain they are enforceable. I would suggest not simply copying another’s contract but obtaining one from a qualified contract lawyer who is paid and will provide an opinion on the enforceability of that written contract.

Thought For The Day

I’ve found that most people who sign a contract don’t really understand what they’re signing, even if they have read the small print.
—Alan Greenspan

1 Florida Roof Specialists v. Arthur, No. 2024-001865-CO (Fla. 6th Judicial Circuit, Judge Carassas Aug. 9, 2024).