A quotation is one thing and the amount on the bill sometimes quite another, as Jan Zwart found out after he had re-upholstered his forepeak.
Jan Zwart thought that the interior of his boat was starting to look a bit bad and visited a yacht carpentry company with the request to make a quote for re-roofing the forepeak. The company sent Black a quote with a request to return it signed. The yacht company was to join the forepeak in teak; walls, cupboards, a bed with hatches and doors, ceiling and solid mouldings.
It started with nothing being done for the first two weeks. Finally, after a good number of weeks (ten working days had been agreed) the ship was delivered. Jan Zwart was only shocked when he received the invoice: over 10,000 euros (excluding VAT). This was not what he had expected on the basis of the quotation and he refused to pay the invoice. After some correspondence back and forth, the shipyard engaged a lawyer. Black made an appointment with me. According to him, the shipyard had said when making the arrangements that the work should be able to be done in about ten working days and the labor costs were estimated at about 4,000 euros (excluding VAT). “It could also turn out to be quite a bit cheaper,” said the yard owner. He had budgeted the material costs at 500 to 700 euros. So Mr. Zwart thought the work would be done for about 5,000 euros plus VAT.
I climbed into the pen to find out more. According to the shipyard’s lawyer, Zwart had ordered additional work which would have fallen outside the budget, and the shipyard further denied that it had said the work would be done for €5,000. Zwart agreed with the comments on the extra work, but felt that this should not have been more than €1,000 extra, so that the total should be about €6,000 (plus VAT). Then the yard came up with the contract: it contained no budget at all and therefore no amount of €5,000, but only a list of the work and the announcement that an hourly rate of €37.50 would be charged and that the work would be carried out under direction (see box). On the one hand, Mr. Zwart stated that a sum of €5,000 had been agreed between the parties and, on the other hand, there was the agreement which stated that the work would be performed on a ‘direction’ basis at an hourly rate. I suspected that it would be a difficult case for Zwart to prove that agreement. I asked for hourly specifications, which showed that the yard had put in an awful lot of hours. However, legal proceedings would be very expensive for Zwart.
The court would not want to make a judgment without an expert’s opinion. I therefore proposed to the yard that an expert be appointed to act as a binding advisor to assess the positions of both parties. 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. The cost of the report was shared. In this way, a substantive judgment was rendered without Jan Zwart incurring enormous costs and a lengthy legal procedure. Given the relatively minor importance, this was a solution he could live with.
Tip: When you enter into an agreement, make sure that a written budget is drawn up with a clear description. 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, a fixed contract price is agreed for the work and will only be settled in respect of any additional or less work. 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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