Cost Estimates in Enterprise Contracts

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An enterprise contract is a contract under which someone - the contractor - agrees to do physical or intellectual work for a client in exchange for payment.

A contractor often estimates the cost of the work before signing this kind of contract with a client. However, an “estimate” is not a final price: it’s an honest evaluation of the approximate cost of the work.

A contractor who provides an estimate cannot increase the total amount of the bill for no good reason. She has to justify any price increase and can only charge her client extra in two situations:

  • The client asks for more work than what was originally intended.
  • The contractor faces extra work or expenses that could not be foreseen when the contract was entered into.  In these situations, the contractor must quickly inform the client of the reason for the increase.  The client is not only responsible for the increased costs if the extra work or expenses were foreseeable.

On the other hand, the client is entitled to a reduced cost if the actual cost of the work is lower at the end of the contract than what was provided in the estimate.

Important !
This article explains in a general way the law that applies in Quebec. This article is not a legal opinion or legal advice. To find out the specific rules for your situation, consult a lawyer or notary.