Mike, a Plumbing Contractor, Was Hired to Correct a Stoppage

question 35

True/False

Mike, a plumbing contractor, was hired to correct a stoppage in the sewer line at Sarah's house. During his work, he discovered numerous leaks in a rusty, defective water pipe that ran parallel with the sewer line. To meet public regulations, the water pipe had to be replaced either then or later, when the yard would have to be redug. Mike replaced the water pipe and Sarah inspected the work daily and did not object to the extra work. When Mike finished, Sarah refused to pay for the water pipe replacement since that was not what she originally hired Mike to do and she had never specifically agreed to that work. Sarah must pay Mike for his labor and materials costs for both the sewer and water line repair.

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Definitions:

Insured

A party that is protected by an insurer against losses caused by the risks specified in an insurance policy.

Insurance Company

A financial institution that provides a range of insurance policies to protect individuals and businesses against the risk of financial losses in return for premium payments.

Economic Loss

Financial damage suffered by a person or entity, often due to breach of contract, negligence, or external market factors.

Insurance

A contract whereby one party pays premiums to another party who undertakes to pay compensation for losses resulting from risks or perils specified in the contract.