Is a Contract Formed if I Never Signed a Contract?

Full question:

I engaged a plumber in August 2010 to essentially do the following-1. Install a water heater 2. Relocate a gas dryer 3. Relocate a sink. He provided a proposal totaling $5200. The proposal starts- 'Plumbing Contractor to do the following work:' I told him it was too much so he agreed to accept cash payments to lower the total to $5000 (not much of a reduction, I agree). He never updated the proposal. There is no signed contract. He has been paid 3500 in cash to date.10 months later he is trying to collect the full 5200 (minus the 3500 in payments received) and additional money for chroming a sink strainer. I am sure it is because I told him on two occasions his job was done and that he was paid an adequate amount for his services rendered. Here are the issues-1. He said the project would be complete in 4 days- 2 for demolition and 2 for installation. The project started on August 30, 2010 and lingered on way past the 4 days and in fact, here we are 10 months later.2. He never installed the sink strainer (drain) and consequently never installed the sink. I agreed to supply the sink stand and faucet only. No mention was ever made of the customer supplying the strainer. In fact, twice, on two separate occasions a month apart, he came to fit the SAME brass strainer only to come to the SAME conclusion- it didn't work because it didn't allow the sink to drain sufficiently. It was also initially unacceptable because it had a brass finish as opposed to chrome. It is a common practice that the finish of the faucet and strainer match. He was given the old existing strainer in an effort to help find a suitable match. He indicated one didn't exist so the option of chroming the existing was offered. I made it clear at the time that he would be paying for the chroming. Two months passed and he called us in January 2011 to tell us he finally located someone to chrome the piece. He was told by my wife not to proceed and that his job was done, and to call me, and he didn't. He then called 4 months later on May 16, 2011 (9 months after the start date of the project) to tell me the strainer had been chromed and was ready to install. I told him on the phone once again, his job was done.(On Monday, as an experiment I wanted to see how long it would actually take to locate someone capable of chrome plating. It took me approximately 2 minutes of doing a search on the internet to locate someone who is local to my address.)3. He punctured a window screen while working on the front porch. 4. His truck leaked oil onto my driveway pavers. 5. He installed the laundry box incorrectly making it impossible to install the finish trim for the box. The box was supposed to be installed flush to the face of the drywall and it wasn't. 6. He was supposed to install hot and cold water shut-offs under the sink and he did not.7. He removed insulation in the crawlspace to install piping and didn't replace the insulation.8. The exterior dryer vent was installed with 2 steel screws, which are now rusting. Since it was installed incorrectly, the vent is now warped. The product is supposed to be installed with 4 exterior-grade stainless steel screws.9. The hot water heater was dented (not significantly) during installation.10. His worker made it clear on numerous occasions that he'd rather be installing fire sprinkler systems in Manhattan. He also had an immensely unprofessional, anti-productive, nasty attitude.My questions-I obviously do not want him to finish the project or correct any of the problems he left.1. Can he place a lien on my house? It has been 10 months since the start of the project, there is no signed contract, and the project is incomplete.2. He sent over a bill for the balance of the project ($1,792.54) that includes the cost for the chrome plating. He indicates the plating was done on May 16, 2011 (after he was told in January not to proceed, and 9 months after the start of the project). He also incorrectly states in the bill that I was supposed to supply the strainer. He never indicated he had intentions to charge me for the brass strainer he wanted to install.3. Is there not a reasonable amount of time one can assume a project to have been abandoned by a contractor? Does this example constitute abandonment?4. He refers to his proposal as a contract. His proposal is all that exists. I can even claim I never received the paper copy- he sent it via regular mail. Can it be considered a contract?- I didn't sign anything.5. What course of action should I take? Ignore him; report him to the BBB; write a letter back stating the job is done and he isn't entitled to anything else; call him to attempt to set him straight; or obtain contractor quotes to finish the project and correct the issues, then use it to attempt to offset the balance he is trying to collect (do I need to go that far)? How should I proceed?

• Category: Contracts
• Subcategory: Breach of Contract
• Date: 04/07/2025
• State: New York

Answer:

It is not necessary for you to sign a paper for a contract to be formed. Because you agreed to have him perform work for compensation, an oral contract was formed. It may be possible for a lien to be filed by the contractor.

An anticipatory breach of contract is a failure to live up to a contract term before the actual time for performance has arrived. It is often occurs when one party states an intention not to fulfill or substantially fulfill a contractual obligation before it is due. Such a repudiation of contract terms is generally required to be affirmatively stated. The repudiating party may not later demand performance under the contract from the other party. The result of anticipatory breach is that the other party does not have to perform his/her obligations and cannot be liable for not doing so. This is often a defense to a lawsuit for payment or performance on a contract. What you have described seems like the work was begun, but left uncompleted. We are prohibited from giving a legal opinion, as this service provides information of a general legal nature. The answer will be a matter of subjective determination for the court, based on all the facts involved. I tmay be possible to file a complaint with the Better Business Bureau, the professional licensing board, or file a breach of contract lawsuit.

If you wish to use the legal system to resolve your dispute, you may want to review the following general information regarding contract law and breach of contract actions:

An unjustifiable failure to perform all or some part of a contractual duty is a breach of contract. A legal action for breach of contract arises when at least one party's performance does not live up to the terms of the contract and causes the other party to suffer economic damage or other types of measurable injury. A lawsuit for breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach. Remedies for contractual breaches are not designed to punish the breaching party. The five basic remedies for breach of contract include the following: money damages, restitution, rescission, reformation, and specific performance. A money damage award includes a sum of money that is given as compensation for financial losses caused by a breach of contract. Parties injured by a breach are entitled to the benefit of the bargain they entered, or the net gain that would have accrued but for the breach. The type of breach governs the extent of damages that may be recovered.

Restitution is a remedy designed to restore the injured party to the position occupied prior to the formation of the contract. Parties seeking restitution may not request to be compensated for lost profits or other earnings caused by a breach. Instead, restitution aims at returning to the plaintiff any money or property given to the defendant under the contract. Plaintiffs typically seek restitution when contracts they have entered are voided by courts due to a defendant's incompetence or incapacity.

Rescission is the name for the remedy that terminates the contractual duties of both parties, while reformation is the name for the remedy that allows courts to change the substance of a contract to correct inequities that were suffered. In order to have a rescission, both parties to the contract must be placed in the position they occupied before the contract was made. Courts have held that a party may rescind a contract for fraud, incapacity, duress, undue influence, material breach in performance of a promise, or mistake, among other grounds.

Specific performance is an equitable remedy that compels one party to perform, as nearly as practicable, his or her duties specified by the contract. Specific performance is available only when money damages are inadequate to compensate the plaintiff for the breach.

Promissory estoppel is a term used in contract law that applies where, although there may not otherwise be an enforceable contract, because one party has relied on the promise of the other, it would be unfair not to enforce the agreement. Promissory estoppel arises from a promise which the promisor should reasonably expect to induce action or forebearance of a definite and substantial character on the part of the promisee and which does induce such action or forebearance in binding if injustice can be avoided only by enforcement of the promise. Detrimental reliance is a term commonly used to force another to perform their obligations under a contract, using the theory of promissory estoppel. Promissory estoppel may apply when a promise was made; reliance on the promise was reasonable or foreseeable; there was actual and reasonable reliance on the promise; the reliance was detrimental; and injustice can only be prevented by enforcing the promise. Detrimental reliance must be shown to involve reliance that is reasonable, which is a determination made on an individual case-by-case basis, taking all factors into consideration. Detrimental means that some type of harm is suffered.

Reasonable reliance is usually referred to as a theory of recovery in contract law. It was what a prudent person might believe and act upon based on something told by another. Sometimes a person acts in reliance on the promise of a profit or other benefit, only to learn that the statements or promises were either incorrect or were exaggerated. The one who acted to their detriment in reasonable reliance may recover damages for the costs of his/her actions or demand performance. Reasonable reliance connotes the use of the standard of an ordinary and average person.