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Publication date: 25.04.2024
I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.
The estimate in the contract is a document that contains the calculation of the cost of construction, installation or other works performed by the contracting organization. It consists of various sections that detail the costs of materials, labor, technical equipment, and other costs associated with the performance of the work.
The main components of the estimate in the contract include:
Work estimation: Determination of the cost of each type of work or work units that will be performed within the project. This can be expressed as a price per unit of measurement (eg per square meter, per linear meter, etc.).
Materials and equipment: A list of materials that must be purchased for the work, along with their cost. May also include the cost of renting or purchasing special equipment for the project.
Labor costs: Costs for the wages of workers who will be employed on the construction site, as well as for engineering and technical personnel.
General expenses: Includes equipment rental costs, taxes, insurance premiums, administrative costs and other general production costs.
Profit and reserves: The estimate may also take into account a certain level of profit for the contractor, as well as reserves for contingencies or risks.
The estimate in the contract is an important tool for the contractor and the customer, as it determines the cost of the project and the terms of its implementation.
Types of estimates in the contract:
In a construction contract, an estimated estimate and a firm estimate are two different approaches to determining the cost of works and services that will be performed as part of a construction project.
Approximate estimate (approximate, tender):
Characteristics: Estimates are used at the stage of tender selection, when the customer receives offers from various contractors and aims to provide a general idea of the cost of the project.
Cost characteristics: The cost of the works may be given as a range of cost or a total amount which may be changed during negotiations or agreements.
Flexibility: This type of estimate is highly flexible and the cost may vary depending on conditions and agreements.
Firm estimate (fixed, rigid):
Characteristics: A firm estimate is used after the conclusion of a contract and aims to clearly define the cost of work and terms of payment.
Characteristics of the cost: The cost of the works is fixed in the contract and cannot be changed without additional agreements and documentary changes to the contract.
Stability: This type of estimate provides greater stability and predictability for both parties - the contractor and the customer.
Both types of estimates have their advantages and disadvantages and can be used depending on the specific conditions of the project and the requirements of the parties.
Making changes to the estimate:
Amendments to the estimate in the contract may be necessary due to various circumstances, such as changes in the scope of work, cost of materials, technical requirements or other factors that may affect the cost and conditions of the project. The parties can enter into an additional agreement to the main contract, which will specify specific changes to the estimate, including the scope of work, prices, deadlines and other conditions. Another way to make changes can be agreement between the parties without concluding a separate additional agreement. In such a case, it may be important to record all agreements and changes to the estimate in writing to avoid misunderstandings in the future. It is worth noting that the procedure for making changes will depend on which type of estimate was chosen, because changes to the firm estimate are made only upon the agreement of the parties. If the contractor needs to carry out additional work and accordingly increase the size of the estimate, he is obliged to inform the customer about this. If this is not done, the customer has the right to withdraw from the contract even in case of disagreement, but the contractor can demand payment for the work actually performed. According to Art. 844 of the Civil Code, the parties to the contract may neither reduce nor increase the size of the firm estimate if at the time of concluding such a contract it was not possible to foresee the full scope of work or the expenses necessary for this.
Lawyer consultation in concluding a contract:
The lawyer services will not help each of the stages of concluding a contract, starting with checking counterparties and ending with signing the contract. The lawyer will provide a quality check of the counterparty using registers, draft the contract, taking into account all the requirements of the law, conduct a legal analysis of the situation and documents. Therefore, consulting a lawyer is a reliable tool for building strong contractual legal relations.
