18/01/2010

Correct and clear price quotations can prevent awkward situations

It is important that the entire order forms part of a written confirmation

Mr and Mrs G., who live in the Grand-Duchy of Luxembourg, asked a Belgian company to re-landscape their garden. The Belgian company gave them a quotation. Mr and Mrs G. decided to have a part of their garden, that was not included in the quotation, re-landscaped as well. When they asked the company what the extra costs were, they were told orally that the additional cost could be as much as € 4000 to € 5000.

When the work was done, the Belgian company sent a final bill to the Luxemburgers. They were astonished when they saw that the price charged for the additional work was more than double what they had been told. They also found that Belgian VAT at 21% was charged instead of Luxembourg VAT at 15%, which also increased the price considerably.

Mr and Mrs G. told the Belgian company of their shock, but were not able to reach an agreement with them. For this reason they contacted the Luxembourg ECC, which passed the file onto the Belgian ECC.

After some research and contact with the Luxembourg tax authorities, it turned out that Luxembourg VAT was indeed applicable to this order. When we informed the Belgian company’s lawyer of this, the air was cleared as regards this aspect of the complaint.

There remained the problem of the costs of the additional work. Because the additional work was not confirmed in writing, it was difficult to determine whether the amount that the company had charged was reasonable or not. The company should in fact have added an appendix to the existing contract. Given that neither party was able to furnish any proof, it was advisable to settle the matter amicably. Starting legal proceedings would take up a great deal of time, and would be expensive for both parties.

The Belgian ECC suggested dividing the amount charged - which is the subject of the dispute - equally between them. After lengthy negotiations, the company agreed to this proposal.

In order to prevent such unpleasant situations, it is important to set out everything you agree with a company in a written quotation. Check whether the quotation defines the nature of the services and the costs as accurately as possible.

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