This Is Why Judge Judy Says Details Are Important in Contracts: This Contract Had Holes

If you are in a line of work that requires a written contract — such as painting and wall coverings, flooring or remodeling — today's story will help keep you out of hot water.

Let's talk about contracts. On any reality television courtroom show, such as Judge Judy, we've all heard, "No matter what you thought, expected or were promised, if it's not in the contract, it's not there."

The reason is that courts have to rely on what's written and cannot consider oral evidence that varies from its terms, with few exceptions.

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Lawyers often hear, "'Well, I assumed that we would have this, or they should have known that.'"

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Making assumptions about what a customer would know, understand and find acceptable, combined with failing to describe the actual appearance of $30,000 in reclaimed wood flooring, is the basis of our story.

Loved hardwood floors

"Martha" and her husband of 60 years, "Thomas," loved the appearance and feel of their Douglas fir floors in the kitchen and family room of the house where they had lived for over 50 years. Like the couple, the Douglas fir had aged beautifully.

One weekend when they were out of town, a water pipe in the wall behind their kitchen cabinets began leaking, flooding the house.

Martha hired a restoration company to oversee the replacement of the floor. The owner, "Santos," told me, "Dennis, if it had just been a few hours, we would have had a chance to save the flooring, but it only takes 24 hours for warping damage to become permanent, requiring replacement."

He added, "(Martha and Thomas') insurance company could not have been nicer to them, immediately approving replacement of all wood floors in the entire house. We seldom hear about the good things claims adjusters do.

"Here, she could have denied coverage on the basis that it was a slow leak that went on for days and was therefore not covered. Instead, she helped this couple."

But that left a question: What kind of wood floors? Reclaimed or distressed wood?

Reclaimed wood is often the most pleasing choice

Reclaimed (salvaged) Douglas fir ideally would be used to replace what had been destroyed. That is any wood that has served its original purpose — for example, old buildings, barns, factories, bowling alleys, gym floors and fences.

Reclaimed hardwood flooring has an aged and worn look that is pleasantly warm with a rich patina. Typically, it has developed a unique character, durability and was often sourced from old-growth trees over a century ago.

Also, it can be far more stable than newly harvested lumber that is "distressed" and artificially made to resemble old wood.

Drawbacks of reclaimed wood

I phoned reclaimed wood dealers across the country and asked, "What are some of the drawbacks, if any, of using salvaged wood for kitchen and family room floors?"

They listed these imperfections that could render the flooring unacceptable:

• Nails and staples, which could cause cuts, scrapes and the risk of a tetanus infection
• Termites, which could spread an infestation to the entire home
• Mold and mildew could expose the family to harmful spores

There also could be knot and bolt holes. Every dealer I talked to cautioned that, while there is no one standard, bolt and knot holes greater than one-quarter inch in diameter that go completely through a plank can be a structural weakness, especially if there are too many, if they're in high-traffic areas or if they're near cracks.

They can also pose a tripping hazard.

One dealer said that consumers need to make sure that they see photos of the actual planks they're buying so they know what they are getting.

The contract

Floor-Co (not the actual name of the company) submitted a proposal to Santos to do the replacement, which Santos accepted and then let Floor-Co do their thing, which is standard operating procedure.

Now, picture yourself as the owner of Floor-Co. Your customers are in their 80s. You install the flooring. Weeks later, a guest trips and falls when the heel of their shoe catches on a large hole in the flooring and suffers a hip fracture.

Is your company at risk of being sued because of the hole the guest tripped over?

You bet!

So, wouldn't it make sense to state, right in the contract, "Customer is aware and understands this reclaimed wood flooring has multiple knot and bolt holes over one-quarter inch in diameter, which create a stability risk and danger of tripping and falling."

But that requires something that is always in short supply: common sense in taking the time to alert your customer to a risk with your product.

Floor-Co's contract stated: "Reclaimed Douglas fir stained and custom-finished to match as close as possible control sample of existing floor." There was no mention of or any photos shown to the customers of what turned out to be a wooden Swiss cheese of bolt holes, some well over half an inch in diameter.

"We assumed they knew what 'reclaimed wood' meant," Floor-Co's angry owner told me after Santos refused to pay for the wood.

Before installation, Floor-Co never showed the material or photos to either the homeowners or Santos, and that wasn't required according to the contract.

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I saw photos and a video of the flooring. It scared me. Holes everywhere — big holes — just waiting to catch someone's toe or shoe. No one in their right mind would ever accept such flooring material. And Martha and Thomas are not cognitively impaired.

"Can you imagine their grandchildren walking barefoot, and one of them gets their toe caught in a hole? Bad fall and loses a toe!" Santos said, "They never even told us when the installation was planned! They just did it over a couple of days. The couple ordered us to remove it when Floor-Co refused."

Customer's right to reject the installation

Since the contract did not disclose the presence, size or frequency of bolt holes, the flooring would likely be considered "nonconforming goods" under the Uniform Commercial Code (UCC), allowing the buyer to reject goods that do not conform in any way.

Floor-Co expects to be paid. Santos and the couple refuse but are agreeable to the installation of distressed wood, or safe reclaimed wood. Thus far, Floor-Co has refused.

Luckier than they realize

Karl Susman, a Southern California insurance broker and expert witness in insurance coverage cases (and also a Kiplinger.com contributor), said, "Floor-Co made the classic mistake of assuming their customers knew the reclaimed wood could have all of these defects, yet they failed to show them photos of what was about to be installed.

"That negligence could wind up biting Floor-Co on the nose if someone got hurt. Instead of complaining, they should thank Santos and the couple for saving their bacon," because since the floor has been removed, no one else is at risk of being injured in a fall.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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