Piet de Wit asked a yacht carpentry company for a quote for the interior panelling of the forepeak. The company sent a quotation with the request to return it signed. The quote did not include a concrete amount, but stated that an hourly rate of €37.50 would be charged and that the work would be carried out under contract (see box).
The carpentry firm had indicated verbally that the work would cost roughly €4,000 in labour and about €750 in material costs. De Wit expected the work to be done for about €5,000 plus VAT. That’s why he was shocked when he received the invoice: over €10,000 (excluding VAT)! This was not what he had expected based on what he had been told. He refused to pay the invoice. However, according to the carpentry firm, De Wit had
However, according to the carpentry firm, De Wit had also ordered extra work, which was outside the budget. De Wit agreed with the remarks about the extra work, but felt that it should not have cost more than an additional €1,000. The total should have come to about €6,000 (plus VAT). The parties could not reach an agreement and Mr Frits was asked for advice.
This agreement can be described as a “contract for work”. The law states that if the price has not been determined when the agreement was concluded, or only a recommended price has been determined, the client must pay a reasonable price. If a guide price has been given, it may not be exceeded by more than 10%, unless the contractor has warned the client in time for additional work outside the quotation.
No specific amount had been agreed in the contract and the yard’s commitment was oral. This was disputed, so the discussion focused on what would be a reasonable price in this case. The hourly specifications showed that the yard had put in a lot of hours. To have that sorted out in court, however, would be costly for White. The court would not pass judgment anyway without an expert’s opinion.
Therefore, the proposal was made to the shipyard to appoint an expert who would assess the positions of both parties as a binding advisor. The expert examined the case and concluded that the yard had indeed overcharged for hours. The invoice was not considered reasonable and had to be reduced by 25 percent. Thus, a substantive judgment was rendered without exposing White to enormous costs and lengthy court proceedings. This was a solution he could live well with.
Tip: When you enter into an agreement, make sure that a written budget is prepared with a clear description and, if possible, a concrete amount. Agree that additional work must first be approved by you in writing and record the financial consequences.
Directed: This term means that the contractor has the freedom to determine how the work will be carried out, particularly with regard to the time to be spent and that therefore usually no agreement on the maximum number of hours applies. On the other hand, there is a fixed contract price for the work in which only additional work or less work will be settled. Such a final agreement gives the client a much firmer grip on the budget and the costs, so that disappointments are avoided afterwards.
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