Settlement

mackthefork · #1 10-19-2005, 07:09 AM

You are a painter/decorator, you make an estimate that a job will come to 7000, the job eventually comes to 9500, you send the bill to your customer. As you expected they question this bill, and you suggest a negotiation.

You know if you go to court with this you are likely to be awarded around 8250, you also know both you and your customer will pay 500 each in costs, your customer has made an initial offer of 7700. Questions - What amount do you aim for in negotiations? What is the minimum you will accept to avoid going to court?

Regards Mack

tek · #2 10-19-2005, 09:37 AM

First, you should have talked to her immediately when you realized the job was going to go over the estimate. Second, your estimate sheet should have a provision for overages. For example, most mechanics cover themselved for the estimate plus 10% over. Third, if you have your bases covered, you just file a mechanics lien on the customers house. They can't sell until they pay it.

SheetWise · #3 10-19-2005, 10:26 AM

[ QUOTE ]
Questions - What amount do you aim for in negotiations? What is the minimum you will accept to avoid going to court?

[/ QUOTE ]
Assuming you have a contract -- you aim for the full amount in negotiations, requesting additional costs if the matter goes to court (such as attorney and collection fees). You settle for the likely award less likely cost.

Good Idea · #4 10-19-2005, 01:59 PM

How about this. You estimate $7000. The bill comes to $9500. You missed by 40%. Find a new line of work or hire an estimator with a calculator.

Regards,
G.I.

Trantor · #5 10-19-2005, 02:08 PM

[ QUOTE ]
You are a painter/decorator, you make an estimate that a job will come to 7000, the job eventually comes to 9500, you send the bill to your customer. As you expected they question this bill, and you suggest a negotiation.

You know if you go to court with this you are likely to be awarded around 8250, you also know both you and your customer will pay 500 each in costs, your customer has made an initial offer of 7700. Questions - What amount do you aim for in negotiations? What is the minimum you will accept to avoid going to court?

Regards Mack

[/ QUOTE ]

Take the 7700. You are fighting over 550, not worth it in your time and adverse publicity to take an apparant generous client to court. If court sees 7700 as entirely rasonable you will pay costs(??) Treat the 7700 as the result of the negoiation of the client accepting a job for 7000 and you negotiating for 8250 as starters

SheetWise · #6 10-19-2005, 03:14 PM

[ QUOTE ]
How about this. You estimate $7000. The bill comes to $9500. You missed by 40%. Find a new line of work or hire an estimator with a calculator.

[/ QUOTE ]

Make sure your attorney has one as well. 2500/7000=.3571

RJT · #7 10-19-2005, 05:47 PM

Mack,

Always start out asking for more than you think you can get. Most times you end up with more than you would have thought possible.

RJT

mackthefork · #8 10-20-2005, 04:46 AM

I'm not a painter, I'm an accountant. It wasn't me this happened to. It happens there was a misunderstanding of some sort, the house was meant to be empty, but it wasn't really specified, just implied. Well it turned out the house was full of furniture, this guy just got on with the job. He's not a solicitor so he failed to do a few basic things that would have prevented this from happening, expensive lesson but a worthwhile one in my opinion, settled for 8000 in the end. Apart from the price the customer was very happy with the job, which made it a lot easier to talk to them about something embarrassing like this.

Thanks

Mack

RJT · #9 10-20-2005, 09:57 AM

MACK,

Sounds like a fair settlement (8000).

My field is accounting, too (private - not public). No wonder we see eye to eye more often than not.

RJT