Legal Question in Construction Law in California

Budget vs actual cost billed

Hired a GC who wrote a vague contract with no schedule of payments due. And only listed a budget for subcontracting trades. He, the GC, stated that the amounts are just estimates and that actual costs will be lower. So far, he asked for the full budget amount on two of the subcontracting. There were change orders supposedly involved, but we did not see or sign any. Do we have to pay for additional work that we didn't authorize? Is the GC required to show us all invoices from subcontractors?


Asked on 3/21/07, 2:51 am

1 Answer from Attorneys

JOHN GUERRINI THE GUERRINI LAW FIRM - COLLECTION LAWYERS

Re: Budget vs actual cost billed

First question - It depends upon whether you impliedly authorized the work, or in the alternative whether the work was done under an emergency situation or one where there was no time to gain your consent. If he had to repair a broken water pipe, for example, that would be something that you would likely have to pay for, regardless of whether you asked for it advance. But if he arbitrarily added an additional window and didn't gain your consent, you would object to that.

Second question - He is not necessarily required to show you invoices, but most contracts require the GC to do so; and if litigation is filed, he will certainly have to turn those over. Given that he promised you that the actuals would be lower than budget, I would insist upon seeing the invoices (and then checking to determine that they are legit). Of course, the counterargument is why would either of you enter into an agreement for one thing if you intended for it to be another? If you wanted the price to be lower than the budget, you should have insisted upon an agreement with a firm price. Situations like this simply lead to disputes (as you now see).

Good luck.

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Answered on 3/21/07, 9:42 am


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