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Old 03-13-2012, 10:07 AM   #1
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Electrician estimates-how wrong are they allowed to be?


I recently used a licensed electrical contractor to install a meter base and mast on my house. He gave me an estimate of $2600 and asked me for a deposit of half that before he would start working. I gave him that amount and he did the work. This week i received his final invoice of costs and the amount due is $2400. That is on top of the 1300 i already gave him. Therefore his estimate was wrong by almost 50%. I talked to him and he said there were no major problems that werent expected in his estimate. I am from Temagami Ontario and this is were the electrician is from and the work was done. Is there a legal limit on how wrong his estimate can be or am i stuck paying this ridiculous amount?

Thanks for any input or response.


Last edited by eli99; 03-13-2012 at 10:17 AM.
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Old 03-13-2012, 10:26 AM   #2
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Electrician estimates-how wrong are they allowed to be?


I can assure you as a licensed electrical contractor myself you would have paid what I quoted you. If I ran into issues during the job that required more money you would have known before I sent you an invoice. I am not sure how it works in Canada, but I put all these things into a contract. To protect me and to protect you. If you have no contract, then you learned a valuable lesson. Get the price in writing before anyone does any work for you.

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Old 03-13-2012, 11:23 AM   #3
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Electrician estimates-how wrong are they allowed to be?


Are you sure the 2400$ isn't the total, meaning you should subtract the 1300$ already paid? I've never ever given a quote for a service change and then added another 50% on after it was done. The quoted amount is how much you should be paying, period.

If all he did was a simple service change and he didn't encounter any problems, 2400$ is still a little high but its about right.
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Old 03-13-2012, 11:30 AM   #4
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Electrician estimates-how wrong are they allowed to be?


I try to educate my customers on this as well as possible. There is a big difference between an estimate and a proposal.

An estimate is just that. It has no bearing on the final cost. When I give an estimate for anything, I provide it in writing along with the hourly rate and a clear statement that the info provided is only an estimate and the actual amount will be billed as time and materials.

A proposal is half of a contract. It should be signed by the contractor. As soon as it is signed by the customer, it is a legal contract. It then locks in a fixed cost for the work, unless both parties sign a change order.

Which is better for the customer? It depends on a lot of things. How much do you know/trust the contractor? How badly do you need to know the cost up front? By getting a signed contract, you guarantee the cost, but the contractor is going to inflate the price over the estimate by as much as 50% or more to cover unforeseen problems.

Think of an estimate as gambling with the cost and a contract as a guarantee, but you pay extra for the insurance that guarantees that cost.

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Old 03-13-2012, 11:37 AM   #5
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Electrician estimates-how wrong are they allowed to be?


Busman, you have an interesting approach to the word contract. In the commercial world I work in, a contract is simply an agreement between two parties to perform work. If it is in writing, it is a written contract, if it is oral, it is an oral contract. A contract can be a fixed price contract, which means that the price is in fact fixed, or it can be time and materials, which of course does NOT lock in a fixed price. A contract can also be cost plus fee, which means that the final price equals the cost to the contractor plus an agreed upon profit rate, which of course means the price is NOT fixed. Contracts usually contain clauses that address unforseen conditions, which can be handled on a change order basis, or can simply be part of the cost plus process if that is the form of contract.

You are absolutely correct in stating that an estimate is not a proposal, and a proposal is not a contract. However, the average homeowner in my experience does NOT know the difference between an estimate, a proposal, and a contract. In this case, the OPS says he got an estimate, but it is clear from the context of the post that the OPS thinks he got a fixed price proposal which became a fixed price contract once signed. To the OPS, I suggest you read the contract very carefully to see exactly what you agreed to, and the point about the total cost perhaps being $2400 is certainly worth investigating.
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Old 03-13-2012, 11:52 AM   #6
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Electrician estimates-how wrong are they allowed to be?


Well thanks very much for the quick and informative responses. Unfortunately i dont have a signed contract or agreement. I felt i could trust this contractor because he is the only licensed electrical contractor in town and the person doing most of the work lives only 5 houses up the street from me. I guess its a lesson learned. Always have a signed contract agreeing on the costs before getting the work done.

Thanks guys.
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Old 03-13-2012, 11:55 AM   #7
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Are you sure the 2400$ isn't the total, meaning you should subtract the 1300$ already paid?
It is definitely not including the amount i already paid, the total invoice asks for $3798.
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Old 03-13-2012, 11:55 AM   #8
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Electrician estimates-how wrong are they allowed to be?


What did he say when you asked him specifically why the final invoice was so much higher than the estimate?
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Old 03-13-2012, 11:59 AM   #9
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Electrician estimates-how wrong are they allowed to be?


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It is definitely not including the amount i already paid, the total invoice asks for $3798.
Ok, so what did he specifically do? Because 3800$ for a service change in ontario is just outrageous. I would never pay that amount, unless he came across something major that needed special attention.
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Old 03-13-2012, 12:32 PM   #10
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Electrician estimates-how wrong are they allowed to be?


If the estimate was verbal, you don't have much recourse. If it was written and the contractor cannot provide sufficient rational for why the billed amount deviates so substantially, then you at least have some sort of case, although not a strong one.

Either way, if it were me, I would pay the other half of the agreed upon amount for the estimate given and say that I was not going to pay more in the absence of any substantiated demonstration of why the project cost was higher. If he wanted the difference I'd make him come after me for it. Chances are good that if he was simply padding his bill because he thought he could get away with it that he would back down. At the very least he'd negotiate the price down.

When someone is the only game in town they can play fast and loose with their rates and their billing for the simple fact that they have no competition. Obviously that is not true everywhere, but it certainly is not rare.
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Old 03-13-2012, 12:32 PM   #11
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Electrician estimates-how wrong are they allowed to be?


Was he required by code to add AFCI's that he did not plan on before doing the work?
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Old 03-13-2012, 12:57 PM   #12
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OK, so you had no written agreement. You still had a contract, at least you would have in the United States under the Uniform Commercial Code, assuming you met the following tests:

1. There was an agreement between the parties as to the work to be performed (you discussed the work in advance, and were sufficiently educated to understand what was being proposed).
2. The parties were in sufficiently strong position to reach an agreement (he did not put a gun to your head).
3. There was an exchange of value between the two parties (he did the work, you paid him).
4. You did not contract for illegal work (he pulled a permit if required).

There are some other obscure clauses, but basically just because it was not in writing does NOT mean you did not have a contract. It may be difficult to determine what the agreement was, since he may disagree with your interpretation. For example, he may argue he had a time and materials contract, you think he had a fixed price contract. There may be a disagreement about scope of work. There may be a disagreement about the standard of performance. Etc. Etc. But you may well have had a contract, albeit an oral one.

I suggest having him come over, you explain your interpretation of your contract (or call it an agreement if you are uncomfortable calling it a contract). He explains his interpretation. You make him an offer. He counters. This is the negotiations dance, and it may save you some money. The option is going to court, which is probably going to cost you more than it is worth.
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Old 03-13-2012, 01:11 PM   #13
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Electrician estimates-how wrong are they allowed to be?


Quote:
Originally Posted by eli99 View Post
Well thanks very much for the quick and informative responses. Unfortunately i dont have a signed contract or agreement. I felt i could trust this contractor because he is the only licensed electrical contractor in town and the person doing most of the work lives only 5 houses up the street from me. I guess its a lesson learned. Always have a signed contract agreeing on the costs before getting the work done.

Thanks guys.
Well If your in a small town and he is the only one doing the work and he screwed you over that much. Here is what I would do. Scorched earth warfare on him. There is a thing called you tube I would show the bid with his company logo on it the work to be done. Then show the work that was done and ask out loud is that worth the cost? Then show the final invoice and bill with his Company name and address on it and ask how can a guy rip off a neighbor that much? Post it on you tube and send him a link to it and tell him your helping him out with free advertizing. Make sure all your Facebook friends share the link too. see how fast his attitude changes then!
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Old 03-13-2012, 01:20 PM   #14
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Electrician estimates-how wrong are they allowed to be?


Without a specific agreement regarding how you would be charged, you are no more bound to pay his invoiced amount that he is bound to accept the $2400 estimated total. Neither of you are entitled to anything specific, because you did not come to an agreement regarding the cost of the work (either as a fixed price or hourly rates) in advance. If you had reached an understanding regarding price in advance, then you would have had an oral contract - but clearly you were not on the same page about the billings, so there was no "meeting of the minds". He did the work without a contract. In the US, he would be entitled to some payment under the theory of "quantum meruit" - reasonable value for the benefit you received. But since he gave you a $2400 estimate, he should have a pretty hard time convincing a judge that he's entitled to substantially more than that. I do not know how Canadian law handles those situations, but it's probably similar since that's an old English common law concept. I'd say you two get to negotiate the price of the work right now, starting from scratch. [I am an attorney, but not your attorney, and not a Canadian attorney. This is not legal advice, just friendly advice. You might want to get an attorney if the guy won't take $2400.]
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Old 03-14-2012, 09:22 AM   #15
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Electrician estimates-how wrong are they allowed to be?


Thank you all again for your interest and advice in the situation. I have yet to talk to him about the final price because i was so outraged at the price that i wanted to get some advice before going to him. I will talk to him and offer him a partial payment somewhere in the middle. I realize that an estimate is not a final agreement of cost and can understand a little bit of overage. He himself said the only problem he had was attaching the mast to the house and that it was the only unforseen problem.

Thanks again for your responses ill talk to him about a fair price today.

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