Can a home improvement contractor charge a home owner $18,000 for something that he sub-contracted out for $10,000?

UPDATED: Sep 1, 2011

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Can a home improvement contractor charge a home owner $18,000 for something that he sub-contracted out for $10,000?

Is there a law that restricts how much he can increase the subcontractor’s bid?

Asked on September 1, 2011 under Business Law, Wisconsin


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You need to carefully read your home improvement contract with your home improvement contractor in that its terms and conditions control your obligation to him or her and vice versa in the absence of conflicitng state law.

Most contractors make additional money on their contract for profit, overhead and supervision of the subcontractors on the job. The contractor typically makes a bid for work on a project of improvement for a stated amount that takes into account estimates and bids of the contractors. The homeowner either accepts the bid or rejects it as a whole.

Many times a contractor will significantly mark up a subcontractor's bid to him or her as part of the contractor's overall bid to the homeowner. This is what seems to have happened in your situation. The contractor can charge a homeowner $18,000 for an item he subcontracted out for $10,000 if the homeowner agreed to the overall written estimate and bid submitted by the general contractor.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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