I know ins and outs of T+M have been hashed out. The decision on the only lawsuit I’ve ever had to file came in today, and I won, but in reading through the legal logic, I came up with a quandry. Here’s my new scenario:
You look at a job and because of the nature of what’s involved decide that time & materials is the only way that makes sense. For the sake of argument, consider that just a given. You set forth the hourly rate and when the customer inquires about a ballpark you spout off a number, believing that this will be fairly accurate at the end of it all. You are incorrect, and realise once involved in the job that it will be considerably longer than anticipated. You have agreed to do the work while the HO is on vacation, and they agreed to leave you a means of contact, and have failed to do so. Your quandry now is do you finish the work understanding that you’re going to be over, or do you risk breach of contract for not completing in time? The court here opinionated that in an open contract such as this would be, it takes the consent of both parties to alter. Catch 22. If you don’t do the work in the time specified, you’re in violation of the contract. If you do the work, even though the contract talks about T+M at $XX per hour, your verbal SWAG apparently has legal standing to some degree, and you could lose your shirt on the job, since they haven’t agreed to “alter” your guess.
– have you run into it, and if not, what’s your take? That seems real screwy, and yes, I agree with the multitudes that T+M has a lot of risks and this is one of them.
Replies
we do some T&M.. but I really don't like it anymore....too easy for me to talk my customers into doing something better... or nicer....and the final sum never seems to resemble the original estimate...besides , I'm an otimist by nature.. so ballparlk estimates reflect that..
guilt and being a nice guy.. i start making concessions and do give-aways..
no.. the estimate is just terrible... but if I wanted to spend the time doing the detailed estimate , then why sign a T&M contract ?... if they don't want to spend the time on a detailed estimate, then I try to avoid giving one at all... it won't be correct.. it will only be wrong ... usually wrong by a lot.. and usually OVER..
I'd much rather spend the time and effort doing a detailed estimate and then selling the job for my price....
Mike Smith Rhode Island : Design / Build / Repair / Restore
I'm thinkin' the same thing for the same reason, Mike.
DRC
"Communication is everything" Lee Iacocca. If you can't communicate, you can't successfully serve your customer - whether the job was t&m or bid.
Brinkmann for president in '04
Also thinking the same thing for the same reasons.
(optimismtic....giveaways....yer me, aintcha? My alter ego...confronted at last....hold still, ya bugger...)cabinetmaker/college instructor. Cape Breton, N.S
Edited 10/22/2002 10:15:55 PM ET by Adrian
Your question is a good start on a law school Contracts mid-term, but you need a few more paragraphs of details for the kids tro sink their teeth into.
Key issue: was there anything in writing? Did your lawyer review it? Di s/he put in the clause "this contract represents the entire agreement of the parties and supercedes and prior discussions or SWAG price estimates"?
And, "The court here opinionated that in an open contract such as this would be, it takes the consent of both parties to alter....." What the heck is an "open contract?" They didn't have that term in the old days when I took contracts.
Catch 22? They didn't leave the contact # they promised, rendering your perform,ance impossible; that's usually a pretty good defense.
Keep in mind, laws and their interpretation vary from state to state and the above is a SWAG!
i agree.
we work time and material on every job. i hate it only when i have to work this way when an upper limit is imposed. what sense does it make to work T&M then set an upper limit, when one should have done a detailed estimate to determine this limit? or you set it astronomically high to cover yourself, then lose the sale because this figure scares off the client.
your particular issue involves change orders, and since no one was there to sign one, work at this point and downstream comes to a halt, whether you had a phone number or not...
IMHO,
brian