Is it lawful for someone to request a price breakdown, including prices we paid for materials and employees’ pay for the job?

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Is it lawful for someone to request a price breakdown, including prices we paid for materials and employees’ pay for the job?

I own a company that specializes in home building and masonry staining. Our company has issued an invoice to a company for masonry staining and they are balking at the charged price, calling it excessively high. They are withholding payment asking for what I believe to be proprietary information. They want to know several things, but the problem areas to me are our price on materials and what we pay our employees. What are we required to tell them, what can I consider proprietary information.

Asked on July 18, 2011 under Business Law, Alabama

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) Can they ask for it? Sure--anyone can ask for anything.

2) Do you have to provide it? Not unless there service contract, etc. between you and them allows them to request this or obligates you to provide it. Otherwise, you do not have to provide this information or breakdown.

3) Can they refuse to pay if they don't receive the data they are seeking? No; they have to pay per the terms of the agreement. Note that even if they believe the price is high--even if it is, objectively speaking, high--that doesn't matter if they agreed to pay this amount.  They have no right to the best or lowest pricing possible, just to pay what they agreed to pay.

3a) If there was a prior estimate or proposal or quotation which showed a much lower price than you finally charged, however, they may have grounds to only pay you per the estimate--that will depend on whether there was an estimate, how firm it was, etc.

4) If they don't pay what you believe they should, your recourse is to sue for the money.


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