When you are talking with potential clients, one of the most important things they want to discuss are the projected costs. Hopefully, you are providing your potential clients with a detailed contract that explains the costs along with the specific services and materials. However, the estimated costs are always subject to change. Right now, we are seeing some of the highest prices for building materials – and all indications are that the costs will continue to climb.
What happens when you have agreed to do a job for a set price; however, now the cost of materials have escalated? The first thing to do is to review your contract (Pro Tip: Make sure you have a contract). Look to see if your contract addresses the issue of price increases for materials. Hopefully, your contract identifies which party is responsible for the added costs if the material prices change. If your contract is silent on this issue, then there could be an assumption that you are on the hook for those added costs; which will only eat away at your profit margins.
There is never a bad time to review your contract to see if there are aspects that could be revised. With the way building material costs are currently escalating, do not let your contract’s language (or lack thereof) end up costing you hundreds, if not thousands, of dollars on your next project.
Zacharia S. Bonham is a partner at Daudi & Kroll, P.C., focusing primarily on Commercial Litigation, Construction Law, Business Law, and Immigration Law. He can be contacted for any questions related to this article or other areas of law at email@example.com or (517) 381-2663.