AboutPeter M. Elliott Expertise First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only.
Experience Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit.
George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')
Question Can a self-employed contractor ethically approach homeowner regarding his quote for remodeling and resubmit the quote? Due to unforeseen sudden gas & lumber price hikes, contractor wishes to requote but is unsure if possible. Quote is only about a week old. How can this pricing issue be circumvented to protect contractor in future? State of West VA.
Answer Hi P. Kirchner (no indication of Mr. Mrs or Ms so apologies for the blunt address),
Please accept my apologies for a slight delay in answering, as I have been travelling in the north of Sri Lanka and communications were difficult, as I was on the road all the time.
We have all been in this situation. Just submitted a bid and the world moves and everything changes. You should go back for a second chance if the alternative is bankruptcy, but you have to prepare the ground.
Work out, realistically, how much the extra cost will be. Decide whether or not you can cover the cost increase, then talk to the homeowner. It is in no one's interest if you go bankrupt completing the Contract, or if you go slow due to a bad cashflow, but then the owner does not want to be ripped off. Most owners are wary, but understand, if it is explained in detail. The owner is more likely to accept an objective detailed document, which he can check, rather than a subjective plea for extra money. We have all had these pleas for extra money, and they tend to fall on deaf ears. You may wish to advise him to go out for revised offers from other bidders, to see if they can absorb the cost increases, and to support your comments.
Alternatively, you could just tell the owner that you have withdrawn your offer, if it has not been accepted yet. Not good for the reputation, but better than bankruptcy. It depends on your standing in the community, relationship with the owner and the general economic situation.
Although no one likes them and they are difficult to operate, In future you could include a price escalation clause. This clause is unusual if the Contract period is less than one year, or even two years in some countries. Price fluctuations are a risk, which is generally covered by the contractor, unless the variation in inflation, or exchange rate, is extremely variable or high.
I hope that your resolve your problem and stay in business.
