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ARI001 11-24-2009 10:26 PM

Discussion on Contractor Estimates/Contracts
 
The example cited was meant to create some perspective on the subject. I fully understand the legalities and differences between an owner and employee. You can absolutely compare the two since both have the ultimate goal of making money while reducing the expenses to do so (for example employees who drive company owned, state owned, or government owned vehicles to and from work). Both feel they should be compensated for their time yet it is all right in the opinion of many here for one to go uncompensated? Seems like a double standard to me. The average business owner works 60 to 80 hours a week. Typically only 30 to 40 are "billable hours". Yet some here feel even more time should be donated for free. People go into business to make money not donate their time (read into this time = money) and skills.

Broken knee you where self-employed for a short time and handed out "plenty" of free estimates. How many of those freebies resulted in work? How much time did you spend away from your family pricing jobs that you never had a chance of landing because the people where not serious and you had no means of distinguishing between who is and who is not interested? Charging a small fee for those estimates would have helped you figure that out and also would have set a value to your time. Did you ever stop to wonder why you where only self-employed for a short time?

There are no huge profits in the construction industry. Whoever said that is misinformed. The average successful construction company has a profit margin of 10% to 15%. Some may manage 20% to 30% if they are in high demand. The average retail store makes 100% profit and marks up merchandise 200% to 300%.

Nap,
You are incorrect the cost to do estimates will be passed on to the contractors clientele either in the form of overhead or directly but it will be passed on. If it is not passed on the company will fail within five years. Most construction companies fail well within the five year period regardless for a variety of reasons. Only restaurants have a higher failure rate then contracting businesses.

Just so you know I'm not defending the guy who offered free estimates then wanted compensation when he didn't get the job. That is b.s. If you are going to charge then you should be upfront about it.

nap 11-24-2009 11:46 PM

Quote:

? Seems like a double standard to me. The average business owner works 60 to 80 hours a week. Typically only 30 to 40 are "billable hours". Yet some here feel even more time should be donated for free. People go into business to make money not donate their time (read into this time = money) and skills
. but their business is not to sell job quotes.



Quote:

There are no huge profits in the construction industry. Whoever said that is misinformed. The average successful construction company has a profit margin of 10% to 15%. Some may manage 20% to 30% if they are in high demand. The average retail store makes 100% profit and marks up merchandise 200% to 300%.
retail stores make 100% profit? Construction company making 10-30%. Sure would like to know where you are located. Contractors typically look for a 4% profit around here and I would like to know what you include in "retail. " Grocery stores operate at around a 10% net profit and I do not believe you can show me a single general merchandise retail store that has a 100% net profit. Walmart operates on around a 3%- 3.5% profit margin and they are one of the more successful and profitable retail markets.

Quote:

Nap,
You are incorrect the cost to do estimates will be passed on to the contractors clientele either in the form of overhead or directly but it will be passed on. If it is not passed on the company will fail within five years. Most construction companies fail well within the five year period regardless for a variety of reasons. Only restaurants have a higher failure rate then contracting businesses.
Did I say anything to the contrary? I know what you are referring to but you are taking it out of context. My post was in the context of free or fee quotes to the customer, directly. In a "free quote" the contractor pays for it but of course, the customer pays for everything ultimately, including the coffee served at the office but you surely do not send him a bill for that.

context man, context.

what makes you think your quote is worth anything to me. That is YOU (the contractor) attempting to obtain work and providing quotes is part of the game. If you don't want to quote my job, fine, I'll accept that but you will also not have a chance to do the work.



You are either in business to do the work you claim you do or you are in the business to work up and sell quotes. Choose one.

ARI001 11-25-2009 07:46 AM

Quote:

Originally Posted by nap (Post 357554)
. but their business is not to sell job quotes.

Correct they are in business to make money. The job quotes are not being sold as the fee does not come close to covering the expenses. It does help to qualify or disqualify potential clients though. Again I am not talking about run of the mill activities I am talking about extensive projects. These projects have many variables that must be considered in order to accurately price the job. Failure to accurately price the job will result in extensive change orders and potentially exceeding your clients budget.

retail stores make 100% profit? Construction company making 10-30%. Sure would like to know where you are located. Contractors typically look for a 4% profit around here and I would like to know what you include in "retail. " Grocery stores operate at around a 10% net profit and I do not believe you can show me a single general merchandise retail store that has a 100% net profit. Walmart operates on around a 3%- 3.5% profit margin and they are one of the more successful and profitable retail markets.

Large commercial jobs may operate around 4% but having been in this industry a long, long time I can tell you that your numbers with regards to that are off. Typical profit margin is 10% to 15% for successful companies. Below 10% in residential activities will result in going out of business. But there is a difference between a 200,000 dollar job and a 2,000,000 dollar job. This would reflect in the profit margin. That said the context of the thread was residential construction activities not comercial. Context man, context. My location is in my profile. Walmart and grocery stores are different animals all together. I was referring more to the clothing outlets, home centers, etc. By the way your numbers for Walmart are off also, they operate well above that margin on most goods (groceries excluded). Don't believe everything you read on the internet. Try talking to people that are on the inside of these businesses (I'm not talking about clerks but rather upper management, ceo's, franchise owners, etc.) and it will enlighten you a great deal.

Did I say anything to the contrary? I know what you are referring to but you are taking it out of context. My post was in the context of free or fee quotes to the customer, directly. In a "free quote" the contractor pays for it but of course, the customer pays for everything ultimately, including the coffee served at the office but you surely do not send him a bill for that.

context man, context.

There are a lot of costs associated with running a business that are simply wrapped up in an overhead percentage. Again the "bill" is not for the cost to do the estimate but is used as a qualifier. Those who do use this system report higher profits and lower overhead. This is because they greatly reduce the amount of wasted time spent pricing jobs for the I wonder what it costs to do this people, or those looking to start bidding wars, as well as the DIYer's who are curious as to how much they will save by doing the project themselves. Understand this system is primarily used as a qualifier not as a means of recouping costs.

what makes you think your quote is worth anything to me. That is YOU (the contractor) attempting to obtain work and providing quotes is part of the game. If you don't want to quote my job, fine, I'll accept that but you will also not have a chance to do the work.

This statement tells me you place no value on the time of the people you are looking to hire to complete your project. Your primary concern is how much can I get for free or for rock bottom cost. You will most likely nickel and dime the project and most likely have unreasonable requests. This also indicates money is a problem (note there is a difference between money is a problem and money is a factor in the deciding process, money is always a factor, but money is not always a problem). Ultimately it is disqualifies you as a client that we would be interested in doing business with. I am only interested in clients that understand the value of a dollar (figuratively speaking) and realize my time and the time of my employees is valuable. I will attain work with or without your project. What makes you think your project is worth anything to me? It's not my quote I am placing value on it is my time. I will give you a ballpark figure for many projects over the phone for free (note most free estimates are ball parks anything missed is simply treated as a change order but this is another topic all together) but I will not give those to you in writing to use as a tool to start a bidding war and I will not tell you that is the actual cost to do the project. It is an educated guess, no more no less.


You are either in business to do the work you claim you do or you are in the business to work up and sell quotes. Choose one.

Wrong again on both statements. I am in business to make money.

nap 11-25-2009 08:09 AM

Quote:

Originally Posted by ARI001 (Post 357611)
Wrong again on both statements. I am in business to make money.

I am off on Walmart? That is odd since I got that from their financial statements they are required to provide to the government by law which are required to be correct.


and if the "average" profit for a contractor is 10-15 %, why do so many go out of business?

Quote:

The job quotes are not being sold as the fee does not come close to covering the expenses. It does help to qualify or disqualify potential clients though.
Oh BS. YOU qualify a potential client. If you cannot do that, you shouldn't be a contractor. Of course there are some that will burn you but you need to read your potential clients better then.

Quote:

Walmart and grocery stores are different animals all together. I was referring more to the clothing outlets, home centers, etc.
YOU FAILED to specify you only meant home centers. Do you really want me to chase their financial reports and prove your wrong there too?

here is something that it does not take a financial analyst to translate so I am hopeful you will understand the statement. It is in a financial planners article on Home Depot:

Quote:

In addition, in the past six years sales have grown from $45.7 billion to $92.5 billion, the number of stores has increased from 1,134 to 2,160, the net profit margin has gone from 5.6 percent to 7.0 percent,
I not seeing that 100% you want to tout.

Rather than trying to simply call be a liar, support your claims.

Quote:

What makes you think your project is worth anything to me?
because if you are a contractor, my project, and the thousands like it, are what you are in business for.

Actually, since you apparently feel that a possible job is not worth anything to you, apparently you are in the business simply to sell estimates.

what a brilliant business model. I can see your adds now:

Want an quote on a building project? Call ARI001. We don't want the project of building it ecause that isn't worth anything to us. All we want is the opportunity to sell you a quote.

Gotta love the mindset of some folks.


Oh, BTW:

Quote:

Failure to accurately price the job will result in extensive change orders and potentially exceeding your clients budget.
NO. You are 100% wrong. Failure to accurately price the job in a QUOTE will result in a loss of profit, and possible a loss of actual money, to the contractor. You do not get change orders simply to try to jack a price in a quote. That is why I differentiated a quote from an estimate and I would NEVER pay for an estimate. It it worthless, both for the build and in court. It is ONLY and estimate.

failure to accurately estimate a job will result in one of two things:

making you look like a complete idiot or a scam artist.

ARI001 11-25-2009 09:12 AM

Quote:

Originally Posted by nap (Post 357621)
I am off on Walmart? That is odd since I got that from their financial statements they are required to provide to the government by law which are required to be correct.

A lot of things are required by law that doesn't mean it happens. There are thousands of ways to skew numbers and make things appear differently then they are. Surely you recognize this. If they can make it appear to the government they are profiting less than it behooves them to do so. What is actually profit and what is reported as profit are not necessarily the same. You are naive if you believe it to be so.


and if the "average" profit for a contractor is 10-15 %, why do so many go out of business?

Lack of business skills. Pour financial management. Highly competitive market. Lack of planning. Poor time management. Lack of policies and procedures. Why does any business go under? You also seem to want to skate around the term successful. By the way I did not make up that figure if you research the profit margin of construction companies you will find that is the average. This has been published in several business and professional publications.

Oh BS. YOU qualify a potential client. If you cannot do that, you shouldn't be a contractor. Of course there are some that will burn you but you need to read your potential clients better then.

I do qualify clients. That is one of many tools I use to do so. I also make sure they place value on my time. I did my time doing free estimates. Since going away from that I like many others who have done this find myself dealing with serious clients of a higher caliber. Just because you place no value on peoples time does not mean that others do not. I also don't do free designs for people, I do however get calls requesting them from time to time. I suppose you think I should do that at no charge also?

YOU FAILED to specify you only meant home centers. Do you really want me to chase their financial reports and prove your wrong there too?

If you have time to chase all that down go right ahead. Chase it all down though not just home depot. I did not limit that to just home centers by the way. But go ahead and chase that information down. It will give you something productive to do. Coincidentally what is reported and what is actual again are two different things. Typically in retail if the product costs $1.00 you mark up $1.00 for profit and then add overhead. The big chains may operate differently but that is how it is done on a smaller scale. But you don't have to believe me if you don't want to. I can tell you I know several highly successful retail owners and most use this price point system.

here is something that it does not take a financial analyst to translate so I am hopeful you will understand the statement. It is in a financial planners article on Home Depot:

Don't care it is well known that Home Depot is in financial trouble. I wonder why?


I not seeing that 100% you want to tout.

Rather than trying to simply call be a liar, support your claims.

I did not call you a liar. Not even once.

because if you are a contractor, my project, and the thousands like it, are what you are in business for.

No. Not every project is a potential fit for every contractor. I am not interested in certain projects and certain project values. I am not interested in bidding every project and do turn projects down with out hesitance if they are not a good fit for my company.

Actually, since you apparently feel that a possible job is not worth anything to you, apparently you are in the business simply to sell estimates.

Wrong again. You asked what makes you think your quote is worth anything to me? I answered What makes you think your project is worth anything to me? See above for the explanation. There can be a multitude of reasons a job is not a good fit for a particular company. I think we can at least agree on that point.

what a brilliant business model. I can see your adds now:

Want an quote on a building project? Call ARI001. We don't want the project of building it ecause that isn't worth anything to us. All we want is the opportunity to sell you a quote.

That is not at all the case and you know it. I have explained why we charge for quotes. If I relied on those charges to make money I would have been out of business along time ago. By the way we do credit the amount of the quote to the contract when people sign with us. That is stated before hand and honored. Also my closing percentage is much higher now than when I did free estimates.

Gotta love the mindset of some folks.

To quote Trump: Its not personal it's just business.

Oh, BTW:

NO. You are 100% wrong. Failure to accurately price the job in a QUOTE will result in a loss of profit, and possible a loss of actual money, to the contractor. You do not get change orders simply to try to jack a price in a quote. That is why I differentiated a quote from an estimate and I would NEVER pay for an estimate. It it worthless, both for the build and in court. It is ONLY and estimate.

failure to accurately estimate a job will result in one of two things:

making you look like a complete idiot or a scam artist.

Wrong again: If I tell you this is a ballpark then if you are intelligent you should be able to figure out that means an educated guess without the benefit of real locked in numbers. There are many change order specialists operating very successfully, who make career out of dealing with a certain caliber of people and the mindsets that accompany those people. I read and hear about it constantly. If I give you a quote then it is based on real numbers and will be accurate and itemized (within reason) for the work specified in the quote. I will stand behind that price and that price is what I can do the job for and make a reasonable profit.

Nap,
I just wanted to add for your benefit that the monetary amount of the job or service does affect the percentage rate of the profit. This is or at least should be addressed during the bidding or pricing stage. This is also why there is a difference in the profit margins applied to commercial projects, large retailers etc. The profit margin I am quoting is for jobs under $850,000. Also remember that profit margin is a direct reflection of risk versus reward. If you would like more information on this subject I would recommend taking classes at your local community college or other higher learning institution on business, business for construction professionals, and construction management. I think you would find it quite interesting.

nap 11-25-2009 09:38 AM

You really want to argue, don't you. You continually fail to support your position yet you state I am wrong. You want to make wild claims that you cannot and will not support. I make a statement that is supportable and you cry that it is not true. What a brilliant strategy to support your position. NOT.

If a person pays for an ESTIMATE, they are a fool. An estimate is not legally binding and therefor is worthless. If you are not willing to provide a QUOTE, then what reason do I have to believe your pricing is anything close to being accurate and proper? None.

Quote:

Typically in retail if the product costs $1.00 you mark up $1.00 for profit and then add overhead. The big chains may operate differently but that is how it is done on a smaller scale
first, you are wrong. Second, you are wrong.

Quote:

The big chains may operate differently but that is how it is done on a smaller scale
.

next thing you are going to post is:

"well, that's how I do it". Keep qualifying your answer and eventually you might be right.

Quote:

No. Not every project is a potential fit for every contractor. I am not interested in certain projects and certain project values. I am not interested in bidding every project and do turn projects down with out hesitance if they are not a good fit for my company.
my statement was a general statement referring to building projects. Of course there are going to be projects you do not want not can handle.:whistling2:

Quote:

Wrong again: If I tell you this is a ballpark then if you are intelligent you should be able to figure out that means an educated guess without the benefit of real locked in numbers. There are many change order specialists operating very successfully, who make career out of dealing with a certain caliber of people and the mindsets that accompany those people. I read and hear about it constantly. If I give you a quote then it is based on real numbers and will be accurate and itemized (within reason) for the work specified in the quote. I will stand behind that price and that price is what I can do the job for and make a reasonable profit.
make up your mind. Either you provide quotes or estimates. They are two very different things and I am glad that you will stand behind a quote because you can be held, legally, to that quote. An estimate is worthless.

edit: at that point, I don't care if you make profit or not. You provided a quote and, if you are doing the work, are bound by the contract incorporating that quote. If you do not make a profit, it is your fault and your problem, not mine.

2nd edit:
Quote:

I just wanted to add for your benefit that the monetary amount of the job or service does affect the percentage rate of the profit. This is or at least should be addressed during the bidding or pricing stage.
addressed with whom? surely you do not address this with the customer. It is none of their business and since you appear to be the only employee in your company, talking to yourself may be justification to have you committed. In either case, there is no discussion nor explanation of the profit with a customer.

Quote:

Also remember that profit margin is a direct reflection of risk versus reward.
man are you lost. It sounds like you just got out of a few of those classes. You need to go finish them where they tell you that although risk v. reward can be a justification for profit margin, I work on the principle that you make as much profit as the market will bear and when one is in demand, they can demand higher profit margins.

ARI001 11-25-2009 10:45 AM

Quote:

Originally Posted by nap (Post 357647)
You really want to argue, don't you. You continually fail to support your position yet you state I am wrong. You want to make wild claims that you cannot and will not support. I make a statement that is supportable and you cry that it is not true. What a brilliant strategy to support your position. NOT.

Believe what you want I don't really care. I have yet to call you a liar. I can tell you I have some inside knowledge with regards to what I think you are referring to. That's as far as I care to go with it in a public forum.

If a person pays for an ESTIMATE, they are a fool. An estimate is not legally binding and therefor is worthless. If you are not willing to provide a QUOTE, then what reason do I have to believe your pricing is anything close to being accurate and proper? None.

Exactly that is the difference between taking the time to put together a quote vs. the free estimate. So of what value is that free estimate: none. Why because in most cases it is just an educated guess with no real numbers behind it. As I said I will give free ballparks. I will not give free quotes.

first, you are wrong. Second, you are wrong.
Really, am I? I fail to see where you have proved that.
.

next thing you are going to post is:

"well, that's how I do it". Keep qualifying your answer and eventually you might be right.

No. I do not own a retail store but do know several people who do and have been successful. The information I shared with you was information shared to me. Take it how you will.

my statement was a general statement referring to building projects. Of course there are going to be projects you do not want not can handle.:whistling2:
You have proven part of my point with that statement. So, why is your job of any value to me?

make up your mind. Either you provide quotes or estimates. They are two very different things and I am glad that you will stand behind a quote because you can be held, legally, to that quote. An estimate is worthless.

Wrong again. You can only be held legally to a contract in which you agreed to perform the service. A quote in and of it's self is not binding. While I am aware some companies do use the same form for both we do not. Estimate is an educated guess. Quote is the real cost based on actual numbers to do the project.

edit: at that point, I don't care if you make profit or not. You provided a quote and, if you are doing the work, are bound by the contract incorporating that quote. If you do not make a profit, it is your fault and your problem, not mine.

I agree it's not your problem whether or not I make a profit and you will not see the percentages used to calculate the numbers. The point was that the quote is based on real numbers. As long as the described scope of work does not change then I'm legally bound to those prices accept in certain situations with regards to unpredictable price increases in material and or labor shortages. If the scope of work changes I'm legally required to hand you a change order whether you like it or not.
2nd edit:


addressed with whom? surely you do not address this with the customer. It is none of their business and since you appear to be the only employee in your company, talking to yourself may be justification to have you committed. In either case, there is no discussion nor explanation of the profit with a customer.

Are you a complete idiot? You address it within the context of the job you are bidding while "crunching the numbers" so to speak. It is not a revealed number and you know it. Now you are just playing games.
As far as the employee comment while I do not own (By the way it is a corporation and while I do have controlling interest I'm not the sole owner) a huge company we do have employees.

man are you lost. It sounds like you just got out of a few of those classes. You need to go finish them where they tell you that although risk v. reward can be a justification for profit margin, I work on the principle that you make as much profit as the market will bear and when one is in demand, they can demand higher profit margins.

This time you are partially correct. Yes profit is somewhat determined by what the market will bare, there is also a margin you must maintain regardless of what the market is. There is also ethics to take into account. I for one have never gouged anyone just because the market would bare it. But to each there own. I have increased margins do to demand, as well as risk, and the PITA factor. By the way I took those classes a long, long, time ago well before I considered opening a business.

nap 11-25-2009 11:12 AM

Quote:

If the scope of work changes I'm legally required to hand you a change order whether you like it or not.
More proof of your ignorance. You are not REQUIRED to do anything not written in the contract regarding a situation where the scope of work changed. You can ignore the change and continue on with the contract until completion and be done with the project. If you decide to accept the alteration in the scope of work, you are still not legally bound to hand me anything. You can simply do it if you want. Now, if you want to contract with me for you to perform the alteration, then, depending on state laws and if the federal Statutes of Frauds would be applicable, you might be required to enter into a written contract with me but even then, you would not be required to hand me anything. You could mail it to me; you could have your child hand it to me; or any number of methods of deliverance of such a contract but by no means should you be under the mistaken impression that you must hand me anything.


bottom line is you are full of **** and only want to argue. You are a waste of my time, energy, knowledge, intelligence, and wisdom. Due to that, you can argue with yourself.

have a great Thanksgiving.

ARI001 11-25-2009 01:11 PM

Attention Nap change orders
 
Nap,
As far as change orders go: Wrong again. I am legally responsible to document in writing any change in the scope of work and get the said addendum signed. Whether there is an additional charge for such work or not. This was covered in detail at a seminar I attended presented by DPOR (State licensing authority). I guess in your opinion they don't know what they are talking about.

295yards 11-25-2009 01:44 PM

Somebody has some serious issues!

nap 11-25-2009 01:59 PM

Quote:

Originally Posted by ARI001 (Post 357725)
Nap,
As far as change orders go: Wrong again. I am legally responsible to document in writing any change in the scope of work and get the said addendum signed. Whether there is an additional charge for such work or not. This was covered in detail at a seminar I attended presented by DPOR (State licensing authority). I guess in your opinion they don't know what they are talking about.

Oh, so now you want to add qualifiers again to attempt to make your answers correct. So, here is your big chance to prove yourself correct:

provide (presumably) Vermont law or rules that require you to document, in writing, any change in the scope of work and additionally have that document signed and that it is to become an addendum to your initial contract.

the thing is; YOU do not know what they were talking about.




So, I await your proof of your statement.

Before you go running off on a useless search, realize that you are speaking of CHANGE ORDERS. A change order, unless contract states otherwise, is simply a proposal by the customer. It is not binding and is fully open to negotiation for all aspects of the performance of the work and costs. Of course a change order, if accepted, would be an addendum to your initial contract. A change order is the customers direction to alter some section of your initial contract. Unless contractually obligated to accept a change order, you do not have to perform any additional work or work different than your contract binds you to.

So, with that in mind, now run off and find your proof.

ARI001 11-25-2009 03:35 PM

Quote:

Originally Posted by nap (Post 357742)
Oh, so now you want to add qualifiers again to attempt to make your answers correct. So, here is your big chance to prove yourself correct:

provide (presumably) Vermont law or rules that require you to document, in writing, any change in the scope of work and additionally have that document signed and that it is to become an addendum to your initial contract.

the thing is; YOU do not know what they were talking about.




So, I await your proof of your statement.

Before you go running off on a useless search, realize that you are speaking of CHANGE ORDERS. A change order, unless contract states otherwise, is simply a proposal by the customer. It is not binding and is fully open to negotiation for all aspects of the performance of the work and costs. Of course a change order, if accepted, would be an addendum to your initial contract. A change order is the customers direction to alter some section of your initial contract. Unless contractually obligated to accept a change order, you do not have to perform any additional work or work different than your contract binds you to.

So, with that in mind, now run off and find your proof.

See page 7 at the bottom of the page.

www.dpor.virginia.gov/dporweb/What You Should Know Before You Hire A Contractor.pdf

or read here if you prefer:

The Board of contractors requires all changes to a contract be made in writing and signed by both contractor and consumer before such changes are implemented.

Change orders are not proposals by the customer. Change orders are exactly what they are a change in the scope of the work or contract if you prefer. They may be initiated by either party. A change order can be issued simply to indicate a change in time frame due to product shortages or to note additional work and labor charges necessary to repair hidden damage. If the customer does not accept the proposed repair cost then a change order would need to be issued reflecting time added to the completion date of the project while the customer found another party to complete the repair. The customer could refuse the change order but then risk breach of contract in the above situation. Depending how the contract is worded and the State laws the customer could then become liable for damages. As I said they went into great detail at the seminar and I have no intention of educating you as to everything that was covered other than to say it was extensive.

nap 11-25-2009 04:26 PM

your link does not work.

Quote:

Change orders are not proposals by the customer
. that;s funny because later in this very paragraph they describe them being exactly that


Quote:

Change orders are exactly what they are a change in the scope of the work or contract if you prefer.
well, if they want to state the change order is a change to the contract, then most of what they say after this is legally incorrect


Quote:

They may be initiated by either party
.I'll agree to that


Quote:

A change order can be issued simply to indicate a change in time frame due to product shortages or to note additional work and labor charges necessary to repair hidden damage
that is not what they defined a change order as previously. A change to a contract cannot be "issued simply to indicate anything". A change to a contract must be be negotiated between the parties and agreed upon by all parties to the contract.


Quote:

If the customer does not accept the proposed repair cost then a change order would need to be issued reflecting time added to the completion date of the project while the customer found another party to complete the repair.
and that is a load of crap. Unless what you want to call a change order is an addendum, it cannot alter the time of completion or anything else.


Quote:

The customer could refuse the change order but then risk breach of contract in the above situation
.BS. It would not be a breach on the customers part, not even close. If the contractor fails to complete the project due to the problem, the customer may attempt to sue for a breach but the contractor can defend such an action on the unforeseen situation. If a court agrees with the contractor, the customer loses. If the court agrees with the customer, the contractor loses. Depending on how a contract is written, finding such an unforeseen problem may or may not be justification for either party to alter the contract and each party may be held to the contract.

Failure of adequate inspection does not require a customer to accept a change order. It more often requires the contractor to figure out how to comply with the contract due to their incompetence


Quote:

.Depending how the contract is worded and the State laws the customer could then become liable for damages
and depending on how the contract is worded, the contractor may become liable for:

1. late penalties if included in the contract
2. liability for costs incurred by the customer due to the failure of the contractor to complete their contract as agreed upon.


Quote:

. As I said they went into great detail at the seminar and I have no intention of educating you as to everything that was covered other than to say it was extensive.
You obviously do not have the legal knowledge to educate me concerning contract law. You obviously got a "cliff's notes" version of contract law and have no real understanding of what you speak.

what you have just described is a log of events and actions. Obviously any decent business person or customer should document all problems, discussions, and solutions concerning a project.


You would be better off sticking with swinging a hammer because you have no idea about contract law. You could easily cost your company a fortune in liabilities with your understanding of the law.

brokenknee 11-25-2009 05:09 PM

Try this link, it is actually on page 10 of the pdf document although it is page 7 of the of the body.

http://www.dpor.virginia.gov/dporweb...Contractor.pdf

This has been a very interesting read. I do have to say that I am in agreement with nap on this one.

To answer an earlier question I was self employed for three years and yes it took a lot of time away from my wife and kids. I had a good reputation for being fair. Reputation is what it is all about, that is something you can not buy.

My wife has always had health issues and I took the easy way out to get insurance. But then that is a whole different thread.

nap 11-25-2009 08:25 PM

Quote:

Originally Posted by brokenknee (Post 357819)

This has been a very interesting read. I do have to say that I am in agreement with nap on this one.
d.

You say that like you expected something other than that.


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