If you are planning to have work carried out on your own residential or rental property, you will first obtain appropriate offers and compare prices.
To ensure that the price comparison is successful and that no unforeseen additional costs arise at the end, the following aspects should be considered when selecting a contractor.
In construction and contract law, there are essentially three types of contracts:
- the fixed price contract
- the unit price contract
and
Lump-sum contract
In a flat-rate contract, as the name suggests, a flat-rate amount is agreed for the work to be performed or a set of work performances, which is ultimately decisive for the invoice.
In this case, the contractor's offer contains either a functional description of the work to be performed (e.g. "sealing the exterior walls of the basement that come into contact with the ground") or a list of individual work services, i.e. work steps and/or materials, which, however, are not priced individually, but for which a flat-rate sum is shown as remuneration at the end.
The lump-sum price contract offers the client and the principal a certain degree of planning security, i.e. financial security, since the agreed flat-rate price is to be paid at the end (unless further services are agreed upon at a later date).
Unit price contract
In contrast to this, a specific unit price is agreed for each individual service in the unit price contract, and the remuneration to be paid is then determined at the end – depending on the specific scope of services.
In this case, the contractor's offer lists individual items of work that include the estimated quantities and volumes (running meters, square meters, number of items, kilograms, etc.) as well as the unit price offered for this (e.g. €10 per square meter for laying tiles). The respective item price and thus consequently the total price of the order are calculated at the end based on the actual dimensions and quantities.
It is therefore possible that the total remuneration at the end is higher than the offer price, for example, if it becomes apparent during the course of the work that the original mass and quantity estimates will be exceeded (even if no additional services are agreed upon later).
It is therefore advisable to carry out the measurements required for the settlement together with the contractor in order to avoid disputes.
Hourly wage contract
In the case of an hourly wage contract, a certain hourly wage is agreed for the contractor's work, similar to a unit price contract. Here, too, the final settlement is based on the actual hours required and worked.
Experience shows that most disputes arise here when there are significant deviations between the number of hours listed in the offer and the number of hours actually required and invoiced.
It is therefore advisable to agree on the daily or weekly submission of timesheets in order to maintain an overview. However, you should only countersign these if you can actually confirm from your own experience (or based on information from family members, friends or the independently contracted site manager) that the hours listed were actually worked.
Conclusion/legal tip:
When comparing several offers, you should never just look at the "final price", because it usually involves unit price or hourly wage contracts. Here it is worthwhile to compare the offers side by side and also to compare the individual items as well as the respective unit prices and hourly wages offered.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.