Legal Adviser: Five Ways to Price the Job

For some jobs, it’s difficult or even impossible to come up with an accurate cost estimate. You may not have a complete set of plans, or much of the work may be concealed behind walls that you can’t tear into until work actually begins. Whatever the reason, when you don’t have a fixed price, you need to write your contract so that you get paid what the job ends up costing. That includes so-called “direct costs” — labor, materials, and subcontracts — plus “indirect” costs — overhead and a profit. Your contract should describe the pricing formula you will use to calculate the actual price. This description will reduce the number of questions your clients ask when