This is the wording of the "Time and Materials" It states:
contract that we signed.
"This is a time and materials contract. The estimated sum is only an estimate and the cost of labor, materials, profit, and overhead to complete the project. Owner will pay all costs above the estimate sum that are needed to complete the project."
This is nothing less than a blank check payable to the builder. If you are wise, you will not sign a contract with this wording. This contract contains no cap or limits on what your project will cost. A contract with this wording gives the owners no control over the project and its costs. More importantly, a contract with this wording prevents the owners from reigning in a rogue builder once the costs spiral out of control as they did in our case.
Our project exceeded the estimate by 62%! Before long, we began receiving change orders (big invoices) resulting from parts of the project that exceed allowances. For example, ground work expenses exceeded estimates, and the cost of building the garage owing to design changes [that we were not informed of] greatly increased the garage costs for materials and labor. While we knew that costs would exceed the estimate and even anticipated exceeding the estimate by 10% - 20%, we never in our wildest nightmare thought that the costs would exceed the estimate by 62%.