Problem: Agreed a quote with customer but only more expensive contractors are available. Do I have to pay?
I was wondering if you can advise me. I am a sole trader and run my own small carpentry business. I recently quoted a customer to do some work to their property. They have a house and a reasonably big garden to the rear where a large timber summer house is located. The summer house is looking a bit tired and they want to refurbish it. Part of my work will be outsourced to another company (electrical), and the customer knew this. The price I submitted was not a proper quote document, just an email telling the customer how much the job would cost. The customer accepted the quote, saying that they “now want to go with this.”
When I contacted the electrical contractor to say to go ahead, they said they do not do that type of work anymore so was pulling out. I have some other quotes from other contractors, but the next was £1,100.00 more in price. When I went back to my customer to tell them, they said as they accepted my quote then I am the one that should pay for the price difference. I told them that this would not be possible, and that I would not go ahead with the job unless it is paid for, in full, up front.
So I wondered if I am actually legally obliged to do this job now, at a loss of £1,100.00 to me, because my electrical contractor pulled out and I have to use a more expensive one or, if it’s OK for me to change my mind and not do the job? No monies have been paid.
Response: Refusing to carry out work is a fundamental breach of contract
From your outline, unfortunately, you have entered into a binding contract with your customer and should you refuse to carry out the work, or insist on payment up front before you commence the work (which would be an unenforceable retrospective term), this will be a fundamental breach of contract that would entitle your customer to accept the wrongful repudiation, bring the contract to an end and pursue you for any losses that may have arisen due to your breach.
Your situation is not uncommon, especially on larger sized projects where there are a number of different contractors employed. But unfortunately, once you have submitted your price (referred to as an ‘offer’), which is then unconditionally accepted, a binding contract has come into existence.
In future, you could submit your price, but make it ‘subject to agreeing mutually acceptable terms and conditions’. This means that your price is not capable of being accepted until you accept the customer’s own offer.
Also, be aware where a client has purportedly ‘accepted’ your offer but includes other terms/conditions, then this is called a counter-offer which has the effect of destroying your own offer, and you then either accept or reject that new offer. For example “I accept your quotation on the condition that you can complete the work within 10 weeks” – this is a counter-offer.
I suggest that you put this down to experience and quickly go back to the client and confirm your willingness to carry out the work at the quoted price, and without receiving payment upfront unless this was agreed from the outset.
© Michael Gerard 2015
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.