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Budget wasnt discussed, contractor charging more than expected, who is to blame?

Budget wasnt discussed, contractor charging more than expected, who is to blame?

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  #1  
Old 01-14-17, 08:50 AM
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Budget wasnt discussed, contractor charging more than expected, who is to blame?

The company that did this project normally builds high end construction for wealthy customers. The customer in this case is used to paying random handymen $10 - $12 an hour. When they discussed the job, neither person talked about a budget/costs. After it was completed, the contractor is charging significantly more than the customer was expecting.

So who is to blame here? One of them, or both of them? Is there a legal ruling here? Like, the contractor has the responsibility of discussing the costs, or something?
 
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  #2  
Old 01-14-17, 08:56 AM
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The customer has the responsibility to ask the contractor for a price or at least a T & M (time and material) labor rate.
 
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Old 01-14-17, 09:01 AM
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I think this post might be better off in legal, a moderator might move it.

Just off the top of my head, I think the contractor is in the wrong.

Rich or poor, if I don't give a customer a written bid, I assume I'm "helping them out" by fixing something for them.

I also warn them if I think they might be surprised by a cost. At least then they have an idea of what's going on.
 
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Old 01-14-17, 09:03 AM
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Contracts protect both parties. I think Pete is right, the customer messed up by not getting a rate in the contract.

Personally, I wouldn't want work on my home to be done by someone only getting $10-12 an hour.
 
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Old 01-14-17, 09:17 AM
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I'd also agree that the customer is responsible for the charges. If the owner didn't discuss it, he is in a sense accepting the rate the contractor charges for the work, as long as its reasonable. Obviously, his rate probably couldn't be extraordinary. For example, $10,000 for a $2000 average cost for that job.
 
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Old 01-14-17, 09:31 AM
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I couldn't imagine starting a job of any size without some sort of discussion about price but I agree since it wasn't discussed it falls on the customer and as long as the price isn't outrageous I don't see where much of anything could be done about it.
 
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Old 01-14-17, 09:33 AM
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Thanks for the input. I'll add that no contract or agreement was put in writing. It was all a verbal conversation, where the customer said what they wanted, the contractor discussed how he would build it, and the customer agreed to his plan. It's a complicated situation because it involves friends/family, and misunderstandings.

The company normally charges $40-$50 hour for labor, but the contractor reduced it to $35 an hour when they learned that the customer was extremely worried about the price. That rate was still not acceptable to the customer. In the end, the contractor dropped the rate to $20 an hour with zero markup on materials, to get the cost down within $400 of what the customer said they wanted to pay.

The contractor is taking a pretty big hit on the job, but no legal action will be taken. I was just curious as to who was to blame, and if there in fact is a legal ruling on such situations.

For context, this was a 4 ft wide, 20 ft long handicap deck ramp, that incorporated 3 14 ft 6x6 posts at the deck to allow for future expansion of the roof. The roof supports were removed after the customer became upset over the labor costs, which in turn resulted in the contractor spending more time on the job.

Total billed time was 3 days (50 hours) for two workers.
 
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Old 01-14-17, 09:43 AM
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I'd say that's a pretty generous contractor.
 
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Old 01-14-17, 09:58 AM
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I'd have to agree.

There's always confusion where the family and business is concerned.
Asking for a price or a contract would be insulting while on the other hand the work is expected to be done for almost nothing.
 
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Old 01-14-17, 10:49 AM
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I think in this case the contractor's to blame for not treating this like any of his other jobs. Unless they were his parents or his kids, he should treat and charge them like any other customer.
And shame on the customer for taking advantage and expecting quality, high end work for practically nothing!
Maybe they're both to blame. The contractor should take what he gets and learn a valuble lesson from this. The customer, on the other hand, has learned that they can take advantage and get away with it. My 2cents!
 
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Old 01-14-17, 01:21 PM
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As a contractor I don't have the time to waste post facto dealing with customers who thought I was a charity giver. I always quote up front and if they can live with the quote, they can live with the invoice, UNLESS there are change orders.

As a consumer, I would NEVER hire someone to perform a job with materials involved without having at least a ball park idea of what it will cost.

Two wrongs make a double wrong.
 
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Old 02-12-17, 09:46 AM
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I'll add that no contract or agreement was put in writing. It was all a verbal conversation, where the customer said what they wanted, the contractor discussed how he would build it, and the customer agreed to his plan.
Well, the normal legal analysis is.
Yes, there was a legal contract, it was a verbal contract.

Payment wasn't discussed, so was left to be determined later.

Two ways to measure payment -
#1 what's a fair market price to the contractor, aka "quantum meruit"
Which is “the reasonable value of the labor performed and the market value of the materials furnished” to the project. Moore v. Spanish River Land Co., 159 So. 673, 674 (Fla. 1935).
So, the value would be determined by a court or jury.

#2 what's the value of the benefit to the consumer. aka "unjust enrichment"
So, for instance, if you have a perfectly good garage door, but somebody convinces you to replace wheels, add stabilizer bars, and change the spring, but all of that is unnecessary, then it's possible that a court or jury might find under 'unjust enrichment' standards that the consumer owes the contractor nothing.

There are other issues about mistake about payment amount, e.g. the Bobby Flay restaurant in Atlantic City,

Bottle of Screaming Eagle Oakmont wine- "thirty seven fifty"
Diners thought $37.50 actually it was $3,750.00
{-normally a $1,250 bottle of wine, so the restaurant is selling at 300% of cost}
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Old 02-12-17, 10:18 AM
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Well, the normal legal analysis is.
Yes, there was a legal contract, it was a verbal contract.
Respectfully, actually, no there wasn't according to the OP. There was no verbal agreement on price. The only thing they verbally agreed on was how it was to be built.

When they discussed the job, neither person talked about a budget/costs.

Is there a legal ruling here? Like, the contractor has the responsibility of discussing the costs, or something?

I'll add that no contract or agreement was put in writing. It was all a verbal conversation, where the customer said what they wanted, the contractor discussed how he would build it, and the customer agreed to his plan.
 
  #14  
Old 02-12-17, 10:25 AM
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It's always been my understanding that if there wasn't a contract, verbal or written - the customer was on the hook for whatever the contractor charged .... within reason.
 
  #15  
Old 02-12-17, 12:49 PM
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Hal is the lawyer here and I think he will agree that there IS a contract regardless of whether or not price was discussed. Without a discussion on price, the customer is agreeing to whatever the contractor charges when the customer gives the contractor permission to start the work.
 
  #16  
Old 02-12-17, 04:37 PM
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Originally Posted by Furd
there IS a contract regardless of whether or not price was discussed.
Yep. Odd as it sounds, "OAK" controls.
This is Offer + Acceptance = Kontract

If you both agree, then the initial agreement is valid, and the rest is worked out as you go.

Originally Posted by Furd
Without a discussion on price,
If there's no discussion on price, then the price is figured out later.

Originally Posted by Furd
the customer is agreeing to
Nope, Ghostbusters vs. Ghozer, "nobody agreed on anything"

No agreement before work starts means. Y'all don't agree.
So, customer and contractor have not agreed on price.
They CANNOT BE FORCED TO AGREE TO SOMETHING THAT HASN'T BEEN AGREED TO.
Without a discussion and agreement on price,
the price is a variable that remains undefined.

How to fill-in-the-blank where they didn't specify the price?
#1 Quantum Meruit - the money spent by the contractor
#2 Unjust Enrichment - the increase in value due to the actions of the contractor.

If neither contractor nor customer has stated a figure, there is no figure.
Yeah, it makes your head hurt (and can make your wallet hurt),
but you make a perfectly good contract without any defined price.
 

Last edited by Hal_S; 02-12-17 at 04:52 PM.
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