Contract negotiations

Trikdagain

New Member
Jurisdiction
Oklahoma
I work for s small surveying company whose engineer abruptly quit last year, before I was hired, which forced the owner to sub the remainder of several contract jobs to an outside engineering firm (the "Firm").


With regard to one of those contracts, my company and the Firm signed a fixed fee contract for $10,500.00, which states, in part, that


"Other design services that are not strictly identified or specifically associated with the completion of the agreed upon project understanding and subsequent scope of services shall be considered as additional services. Additional services shall include Owner directed work that is clearly outside of the base contract and agreed upon in writing by both parties. The fee structure for additional services shall be based on time and expense effort unless otherwise negotiated prior to services being rendered. "


We have been billing our client exactly what we have been billed by the Firm (no mark up) and it was only recently that I realized the Firm had stopped billing us for the contracted services about a month ago when we had paid them only $9,450.00 ($1,050.00 less than the contract price) In addition, they had billed us $3,545.83 for "additional services". In essence, they have billed us $2,495.83 above and beyond the agreed upon contract price.


To date we have paid them a total of $4,887.89 which leaves $5,612.11 due on the contract price of $10,500.00.


They contend we still owe them a total of $6,262.50 on the contract plus $1845.00 for additional services.


What we would like to do is pay them $5,612.11, or the balance due on the original contract and take over the work going forward as we have hired an engineer.


Are we obligated to pay them for charges over and above the original contract price?
 
Are we obligated to pay them for charges over and above the original contract price?

Yes.

You (or your employer) accepted the "additional services" that were performed. Now you get to pay for them.

By failing to address the "additional services" before or at the time of performance, you (or your employer) constructively approved of them. That's how it works.

Somebody was asleep at the switch. I wonder who.
 
Thank you so much for your swift response. I am assuming, if we had "caught" the overbilled amount before paying it, then we would not be on the hook for it? Also, is this a commonly accepted occurrence in the construction industry? Or is it considered by most to be a "dishonest" (for lack of a better term) billing practice?

Again, thank you so much for your help.
 
Thank you so much for your swift response. I am assuming, if we had "caught" the overbilled amount before paying it, then we would not be on the hook for it?

Not necessarily. You should have been monitoring what the firm was doing to make sure there weren't any additional services going on.

You can certainly pay the balance of the $10,500 and dispute the additional amount and argue that the approval for the additional services had to be in writing for them to be paid for it and see how that goes.

Also, is this a commonly accepted occurrence in the construction industry?

Doesn't matter if it is or it isn't accepted by the construction industry. That has nothing to do with your contract with the "firm."

Or is it considered by most to be a "dishonest" (for lack of a better term) billing practice?

Also irrelevant as to who "considers" what.
 
Not necessarily. You should have been monitoring what the firm was doing to make sure there weren't any additional services going on.

You can certainly pay the balance of the $10,500 and dispute the additional amount and argue that the approval for the additional services had to be in writing for them to be paid for it and see how that goes.



Doesn't matter if it is or it isn't accepted by the construction industry. That has nothing to do with your contract with the "firm."



Also irrelevant as to who "considers" what.
Thank you very much for your help. We have other contracts with this firm and you can bet I am keeping an eye on the billing!!
 
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