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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 44875
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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If we have a fixed price contract with a client, that involves

Customer Question

If we have a fixed price contract with a client, that involves some design work and have based it on an estimate of 2 days work. When we do the work we find that the requirements and demands by the client show that this is now 2 to 3 weeks of effort are we obliged to still complete this work.

What would be the worst case scenario if we did not continue work on this?
Submitted: 3 years ago.
Category: Employment Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones :

Hello, my name is Ben and it is my pleasure to assist you with your question today.

JACUSTOMER-yqrglefg- :

ok thanks

Ben Jones :

why is there such a big difference in the tie required?

JACUSTOMER-yqrglefg- :

this is not under employment law, its more about commercials with a client we have.

JACUSTOMER-yqrglefg- :

The big difference in the time required has come about for the following reasons:

JACUSTOMER-yqrglefg- :

1) The level of effort was highly underestimated, we could not easily predicts it
2) We are relying on the client for resources to help with the project, these were not available to the level we required

JACUSTOMER-yqrglefg- :

3) The projects has a lot of dependencies on the client, so when building the design work and implementing on their system it took a lot longer due to unforseen circumstances

JACUSTOMER-yqrglefg- :

4) What was expected by the client and what we thought was required was quite diffrent

Ben Jones :

When you agreed to do the work in question for the time and price given you would have entered into a contract with the client and would have been expected to complete it as promised. Of course things are not always as simple as we want them to be and there can certainly be unexpected issues arising that mean either party may not be able to fulfil their part of the bargain. The main issue is what can these issues be attributed to and were they entirely unexpected or can they be blamed on either party.

So for example, something entirely unexpected that no reasonable professional in your position could have known in advance or predicted could result in you going back on the original agreement and negotiating changes to it. Similarly, any issues that can be attributed to the client can also be highlighted and you can argue that if they had done as agreed then these issues would not have arisen.

At the moment it is all about negotiation, trying to find some middle ground on this and agreeing a way forward. The worst case scenario would be that the client takes you to court, they win and are awarded compensation for putting things right, in other words looking at what you should have done, what you did not do and compensating them for getting someone else to do the outstanding work for them. As mentioned this can be avoided by negotiations and also if you are prepared to do the work yourself even if you do not get paid the full amount for the outstanding time you have to put in.

JACUSTOMER-yqrglefg- :

I think we cant negotiate much more as we have already talked about this.

JACUSTOMER-yqrglefg- :

I just want to know the worst case scenario if we were to say cant complete this work, do we not get paid what would our libality be? We can then make the decision to just continue with the work or cut our losses

Ben Jones :

they can refuse to pay you on the argument that you have not done what you promised to do but if you have done some of the work for them you can expect to be paid at least a proportion, it just means that they can still try and get compensation for getting someone in to complete the work that you should have done so in some respects it may be best to cut your losses by completing the work and negotiating the best increase possible

JACUSTOMER-yqrglefg- :

Ok, so how do we assess how much is left for completion, as that is still an unknown

JACUSTOMER-yqrglefg- :

We have completed 80% of the project but the last 20% seems to take a lot longer

Ben Jones :

I can't say that it is a professional opinion for you, it is not a legal matter unfortunately

JACUSTOMER-yqrglefg- :

ok

Ben Jones :

if it was to go to court then the court would probably get the opinion of an independent tradesman

JACUSTOMER-yqrglefg- :

ok

Ben Jones :

Please let me know if this has answered your query or if you need me to clarify anything else for you in relation to this?

JACUSTOMER-yqrglefg- :

I am still not sure this has given me the required information I need

JACUSTOMER-yqrglefg- :

At the end, you are stating that we just need to go to court, but we dont know what our liability might be.

JACUSTOMER-yqrglefg- :

Is the liability based on % we quoted... or value ot the client

JACUSTOMER-yqrglefg- :

so if we quoted £1000, but to the client the project benefits are worth £100,000 and we did not complete

JACUSTOMER-yqrglefg- :

would we be liable to the value of the £100K ?

Ben Jones :

well unfortunately I am not a professional tradesman who can assess the potential liability - that will depend entirely on what was originally agreed, what is outstanding and the reasons for the inability to complete the project. Of course your liability will not stretch to such proportions as you have suggested because a court would still need to act reasonably and seek an independent opinion as to what a reasonable tradesman in your position would have charged to do the work

JACUSTOMER-yqrglefg- :

ok

JACUSTOMER-yqrglefg- :

But until the full scope is uncovered how would the tradesmen know?

Ben Jones :

well it would have to be about a professional opinion and estimate based on whatever information is available

JACUSTOMER-yqrglefg- :

ok

Ben Jones :

anything else I can clarify for you?

JACUSTOMER-yqrglefg- :

well bottom line is we just dont know...

Ben Jones :

no you don't and unfortunately that is the case with such situations, you can have an idea but until it goers to court and a judge makes a decision you will never know the full extent of that your liability may be, there is little I can do to change though

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