Can a homeowner back out of contract with a general contractor after the claim is approved by the insurance company?

UPDATED: Nov 21, 2011

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Can a homeowner back out of contract with a general contractor after the claim is approved by the insurance company?

A homeowner signed a contract with us stating if our estimate was approved by the insurance company that we would be doing the repairs. We know the claim was approved per the insurance company but the homeowner won’t talk to us now. I’m not sure if they are just wanting to keep the money or hiring someone else.

Asked on November 21, 2011 under Business Law, North Carolina


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you are a licensed contractor and have a valid contract with a homeowner for a work of improvement on his or her home subject to no remaining contingencies, the homeowner can back out of the agreement for you to do the work.

However, if the homeowner breaches the agreement and you do not do the work of improvement, your damages as a licensed contractor would be the net profit that you would have received on the job. I would write the homeowner a letter stating that you are ready, able and willing to begin the job requesting a start date and see what happens. Keep a copy of the letter for future reference.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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