I was on a job, which was a boiler clean-and-service. The customer was having a problem with his hot water. He had a service call one or two weeks before, and the tech just took out the mixing valve thermostat and used a commercial coil cleaner to get him on-line again.

Now the customer wasn’t happy with the results, so he asked me if I could fix the problem after I did the cleaning. Since this is not covered on the contract, it would be extra. He agreed with this. I also told him with all the things I had to do that it wouldn’t be just a 15-minute job. He agreed. I did the job. He signed the work order.

His wife refused to pay the bill because she did not authorize the job. Our company gave them the job for free. What should our company have done?

Answer:

Like many questions, this particular question has both a legal aspect and a client relations aspect.

From a legal standpoint, the approach adopted by the company in addressing this situation was not inappropriate.

First, the company determined that the work that was being requested by the customer was not covered under an existing contract or agreement between the company and the customer. Having made that determination, the company quite properly informed the customer of this fact and the customer agreed with that determination. The company and the customer then essentially agreed that the additional work would be part of a new agreement, pursuant to which the company would be paid for the work.

The critical next step for the company was to get this new agreement in writing. It appears that the company did this by getting the customer to sign the work order. While the exact language of the work order and other circumstances would need to be reviewed to provide a definitive answer, in all likelihood the customer legally obligated himself to pay for the work when he signed the work order.

The customer could subsequently raise some legitimate defenses to his obligation to pay for the work, depending on the circumstances. For example, if circumstances warranted, the customer could assert that payment was not due because the work was not done properly. However, in this case, the customer asserted no such defense, but instead appears to have claimed that he did not have to pay for the work because his wife did not authorize it. In most circumstances, such a claim would be legally tenuous.

Assuming that the husband had an ownership interest in the house or dwelling unit and was in a position to authorize the work in the first place, it would make no difference that his wife did not also specifically authorize the work. Ordinary commerce could hardly go on in this country if both a husband and a wife were required to authorize every debt incurred or purchase made by one of them. Therefore, it is likely that the company could have enforced its right to receive payment for the work that was done. In fact, even if the company had been required to obtain the wife’s authorization and had not done so, the company might still be entitled to payment for the work done under some circumstances.

Having said that, the other aspect of this situation is, of course, the client relations aspect, which is what appears to have determined the company’s ultimate course of action in this case.

An attorney can advise a company of its legal rights in a situation like that described here, but, in the final analysis, a company’s decision about whether to enforce its rights will always be a matter of business judgment.

In this case, the company may have legitimately decided to forego its right to payment in order to try to keep the husband and wife as customers over the long term. In such a situation, a company could also try to reach a compromise by agreeing to reduce the bill. There are many potential resolutions. The company must ultimately determine which one makes the most sense from a business perspective.

Jackson is an attorney with the Washington, DC, law firm of Kelley, Drye & Warren, LLP.

Note: This feature is intended only as a forum for information and general discussion. Any information provided is not in the nature of legal representation and is not intended to establish any attorney-client relationship. Any information provided should not be relied on without consulting an attorney to discuss the specific facts relevant to your situation.

Publication date: 05/13/2002