Can a contractor change the bid amount after a project is complete?

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Can a contractor change the bid amount after a project is complete?

If I receive a bid for a business remodel, is that the amount I would expect to pay the contractor? At least as long as I did not change the design after the contract was in place and construction began?

Asked on November 28, 2011 under Business Law, South Dakota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

It depends entirely on what the bid says. Was it a "firm" bid? If so, then if you did not change the specifications, then the contractor should not be able to increase prices, unless and only to the extent that the bid itself provided for certain increases. (For example: say it the bid was for $50k for labor plus the cost of materials; if the materials cost went up since the bid, that could justify an increase.)

However, it is not required that a bid be absolutely firm: a bid could represent merely an estimate, with the actual cost to be determined with reference to some formula. For example, it could estimate the number of hours of work and provide a cost/hour, but the final cost would depend on actual hours expended.

The law does not specificy whether a bid be binding or firm or not; again, you need to review its terms. If in doubt or there is disagreement over what the terms mean, you should enlist an attorney to help you; a lawyer would need to review the bid and other documentation in detail to help determine what your rights are.


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