Contractor Pricing Went Up After Agreed Upon Price

[lstar27]

We just built a new home. The builder told us a unit price for sod over the phone and then when they billed us the unit price went up. Is this legal? They did not let us know this was changing. He also ended up charging more for excavation, etc. He gave us estimates and it ended up being $1500 plus more.

 

[Zigner]

We just built a new home. The builder told us a unit price for sod over the phone and then when they billed us the unit price went up. Is this legal? They did not let us know this was changing. He also ended up charging more for excavation, etc. He gave us estimates and it ended up being $1500 plus more.

Sorry, this forum is for US law only.

 

[lstar27]

I live in Minnesota. My work is based in Canada, so the IP address may show up that it is from there, but it is not. Thanks!

 

[quincy]

We just built a new home. The builder told us a unit price for sod over the phone and then when they billed us the unit price went up. Is this legal? They did not let us know this was changing. He also ended up charging more for excavation, etc. He gave us estimates and it ended up being $1500 plus more.

You should have been informed by the builder of any increase in price that was going to be well outside the costs of the estimate provided, so you could approve it. You did not have the estimates from the builder in writing?

 

[lstar27]

No, he always calls us over the phone even though we ask him to email us. We did document in email to ourselves exactly what he said and when he called us to tell us.

His explanation now is that the price of sod went up since then. Is that our fault, not really if he didn't inform us.

 

[quincy]

No, he always calls us over the phone even though we ask him to email us. We did document in email to ourselves exactly what he said and when he called us to tell us.

His explanation now is that the price of sod went up since then. Is that our fault, not really if he didn't inform us.

When estimated costs are exceeded, who should pay for the excess can always be argued. It makes it harder to argue, however, when all terms of an agreement have been reduced to writing. With oral agreements, the parties to the agreement may remember the terms differently, and it can get complicated when cost overruns have not been addressed in advance.

Most people will start a project knowing how much they have to spend or how much they are willing to spend. This is usually communicated to the person or persons working on the project. That is why estimates can be important. If a builder's estimate is too high, a person can decide to increase their budget, make cut backs elsewhere, or get estimates from other builders. Very few people are in a financial position to say that cost is not an issue.

For your builder to bill you for sod in an amount far in excess of what was estimated, without discussing the increase in the cost with you, should mean the overage is on him and not you. However, with an oral agreement, it is rarely that simple. The builder could claim that your words or actions led him to believe that cost was not an issue. He could claim that it was impossible to perform all that you demanded of him without going over the estimate. Conditions were beyond his control (the increase in the cost of sod was not his fault). He could claim that he never gave assurances that the estimate was a firm figure and, on the contrary, told you the final figure could be greater if the costs of material went up.

I think you need to review all facts of your oral agreement with an attorney in your area, to get a better sense of what your responsibilities might be in paying the unexpectedly large bill. You may find that paying the $1500 will be less expensive than trying to fight it out in court.

BUT, before you see an attorney, I suggest you speak to the builder about the bill and the estimate and your expectations, and see if you can come to a reasonable compromise on the final costs.

Good luck.