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Question DetailsAsked on 9/28/2015

Actual hours vs. quote

I received a quote to have drywall repairs from water damage. It estimated 24 hours to repair the damaged drywall along with 12 hours for painting. The actual hours were actually half of what was quoted.

Am I obligated to pay the full amount or pro-rate the hours to hours actually worked?

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Depends how contract was written (or quote, if done on the basis of a written quote you thenn signed to make it a contract). If the contract was based on an ESTIMATE with work to be billed on an hourly rate plus materials (presumably with a markup % on materials), then you should pay for the actual materials cost plus markup, and the actual number of hours at the specified billing rate. This would be a "cost-plus" or "T&M" (time and materials) job. With that scenario, you as the owner bear the risk of overruns and of the possibility of his "padding" the job by working slow, but also you get the benefit of possible cost underrun, and he had the security and advantage of having no overrun risk (within reason) but also lost the possibility of coming out significantly ahead on the deal if he finished under estimate. Commonly used for small repair jobs like with plumbers, electricians, HVAC technicians, handymen - especially if their actual scope of work cannot be determined until they get into the repair. Sometimes with that kind, say a HVAC repair, the initial tearing into the job for inspection and diagnosis will be time and materials, but may convert to a fixed price quote from there on (which may or may not include the initial inspection/diagnosis phase) - say a repairman investigating a water heater or A/C issue which then leads to him recommending a major unit replacement - so the initial investigation might be entered into on a cost plus basis, but the actual replacement (which you might get competing bids on if a major amount) might be on a fixed-price basis.
If he instead gave you a firm QUOTE or BID amount, for a fixed price (or perhaps fixed labor plus materials cost with a specific markup) then you would pay that lump sum amount (or lump labor plus actual materials with markup as applicable), regardless of whether he overran or underran. In that payment scenario, which is usually used for fixed scope of work projects that can be determined up front and for larger jobs like remodels or new construction, he is absorbing the overrun/underrun risk (hence likely to be as liberal with his estimate as he thinks he can be without being underbid by other contractors), and you have the security of a fixed, predetermined (excepting for changes of conditions or scope) cost, though by eliminating your absorbing any of the overrun risk you also lose the benefit of any underruns. It all comes down to what the contract states the payment method is. There may also be state or city law in effect regarding allowable overrun in the event of cost-plus without prior agreement to a higher amount by the owner, and sometimes also regarding the underrun amount allowed before he has to adjust the price downwards.
FYI if interested - here is another similar question with responses, looking at the same question - https://answers.angieslist.com/What-b...

Answered 3 years ago by LCD




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