Legal Question in Construction Law in North Carolina

Is there a legal limit that an estimate should not exceed?

I realize an ''estimate'' is not typically a binding contract - However, if a builder exceeds an estimate (confirmed in writing) by 100% - is there any legal recourse?


Asked on 11/12/02, 8:58 pm

1 Answer from Attorneys

John Kirby Law Offices of John M. Kirby

Re: Is there a legal limit that an estimate should not exceed?

I do not know the absolute answer to this question. As a general matter, you are correct that an estimate would not be binding. Of course, if there were a provision in the contract that stated (a) that the contractor would stay within, e.g., 20% of the estimate, or (b) that the contractor would need permission to exceed the estimate by, e.g., 20%, then that would be a different situation. Otherwise, I would think that you would be under a general scenario where you would be obligated to pay him for the fair market value of his work. (Another measure of compensation might apply if, for example, you had agreed to pay him on some fixed basis, such as "time and labor", or "cost plus.") The only other restraint on the contractor's fee is that his estimate should not be "fraudulent" or done in "bad faith" or "unfair or deceptive." Under the law, there is some recourse under these situations. The distinction is between (1) a good faith, reasonable estimate that the contractor exceeded, perhaps for reasons beyond his control, or for reasons that he did not anticipate, but that the work and the price is ultimately reasonable for the job performed and (2) an unreasonable estimate, perhaps given in bad faith, to induce you to enter the contract, with some awareness that the contractor was likely to exceed the price. You may of course try to negotiate the matter with the contractor. Another responder may have more specific information for this situation. It would seem that ultimately charging you double (as I understand your question) is somewhat peculiar, and may be some evidence of bad faith or fraud.

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Answered on 11/13/02, 9:56 am


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