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 -------------------------
Followup To
Question -
I own a fully licensed/insured/AHAB member constuction company in Alaska and made a really stupid mistake, One I haven't made in 6 years of buisness, I started a project without a written estimate/bid. I gave a hip shot estimate for a small remodel project and I neglected to follow up with an actual written bid partly because they are a friend of friend and partly because we are extremly busy,I know no excuse now I am faced with a client who upgraded just about everything and is threatning to sue us for everything above the original verbal hip shot. I have offered to remove all overhead and profit that were due and complete project with nothing going to us but it appears they want to force us to pay the difference, Which will be about 3 to 4 thousand dollars in labor and materials, Is there any way to fight this or am I doomed to pay for this clients upgrades.
Answer -
Hi Mark,
You have a contract with agreed work and benefit, but how do you prove the extent of it. Your client has the same problem - how does he prove that you have not completed the work as originally specified. You do not say how much the extra work is relative to total amount. If it is less than 5% of the total, then do the extras and walk away and learn from the experience. If it is more than 50% of the total, then your client is being greedy and needs to learn a lesson, but that is a personal opinion, not a legal one.
There are two possible strategies:
a) ask your client to define the extent of the outstanding work in writing to avoid future misunderstanding and to confirm that the work was included in the original specification, and then prove him a liar or
b) state the original content and price and list all extras with their cost effect and bill him for all extras and let him prove that your statements are incorrect. He might claim foul, but at least you have limited the extent of your loss, because it will be clear that future instructions will be chargeable;
c) bite your tongue, do the work and wait for him to order further extras.
You know the situation better than I so the decision must be yours.
Of course you could mention his behaviour to your friend and tell him not to send you any more similar customers.
Make sure that any legal work is done in the small claims court, without lawyers, to minimise costs to you both. Do not offer to do the work without OHP, because that could be taken as an admission that your client is correct.
In future, make notes of all changes issued by the Client and confirm his instructions in writing, otherwise he will assume that it has no cost effect. If you do it gently with the first instruction, the Client soon learns. You will continue to make mistakes on every job. The trick, that comes with experience, is that the mistakes do not kill you, merely cause pain. You will always be too busy to do the boring administrative work, so you have to find an alternative solution. How much would it cost you to employ a part time secretary to send out estimates from a Dictaphone recording? Probably less than your loss in time and money and aggravation on this one. Also, a good secretary will help you manage your time better, allowing you more time to do what you are good at.
I hope that your business continues to grow and that you continue to be busy AND profitable.
I made the offer to remove all OHP and complete work if he would agree to pay all oustanding invoices. How is that a admission of guilt on my part when I am trying to accept respnsibilty for the mistake of not giving a written estimate.
Answer Hi Mark,
The 'mistake' of not issuing a written quotation does not, in itself, have a monetary, or contractual, value. It just makes it more diffiuclt to prove the content of the original contract, for both parties. The client's mistake seems to be much larger in that he has ordered extra work and now refuses to pay for it.
Any weakness on your part, such as offering to reduce the price, could be taken by the court as an admission that the other party is correct in their contention. I do not say that it is logical or correct, but I warn you that that is how the law works sometimes. If you should wish to make an offer, it should be made as an 'ex gratia' offer, with no admission that the other party is correct. You should make it quite clear that you do not accept the client's comments and that you are only making the offer as a gesture of good faith to expedite a solution and to avoid possible legal costs in fighting the client's failure to pay for the work.
As an additional strategy, you could consider placing a mechanic's lien on the client's property. There are lots of webs sites advising on the requirements and strategies for both debtor and creditor.
Am I missing something from your original query? He is threatening to sue you for what and on what basis? If the work has not been done, get him to define the outstanding work in writing and then give him a quotation to finish the work, or if he is refusing to pay for extra work, which has been supplied, then apply for a mechnaic's lien on his property. the importat thing is get the differences in opinion in wiriting so that you can define your differences objectively and more forward.
I still hope that your business continues to grow and that you continue to be busy AND profitable.
