Recently sprung out on my own as an LLC after 22 years working for others and I have a question regarding using contracts with customers. What kind of contracts/procedures do you have your customers and subcontractors sign before you proceed with work? Do you use a standard issue general contract that you get online or from office depot? Or do you use a contract that was custom generated for you by your lawyer to cover your bases more than just a general over the counter contact from the box stores?
Thanks
BjR
Replies
Others more knowledgable then myself will be along with more information.
I will suggest purchasing a copy of The Contractors Legal Kit published by JLC.
http://www.jlconline.com/cgi-bin/jlconline.filereader?4460d1f7000c6c2d27177f00000105a6+EN/products/LB200
Though I am not out on my own I have found the information provided helpful in fine tuning some of our processes.
As for what we have people sign, At the end of our proposals are payment terms are spelled out. Then there is a boiler plate section stating they are entering a contract etc. They have recieved a Notice of Resecsion, and if applicable, they have Recieved the phamphlet about lead paint.
We also attach a copy of our Standard Contract Provisions with all the small print type stuff.
What ever you end up with I would suggest having a laywer look over your final draft.
Are your "Standard Contract Provisions" custom for your business created by your lawyer or a boilerplate type document? What is a Notice of Recescion?
Thanks good info.
BjR
What is a Notice of Recescion?
To learn more about the right of rescission read this document.
I completely agree with CAG, get the Contractor's Legal Kit and read up. You will not find answers to all your questions but it's much cheaper to read the book than to pay a lawyer to educate you.
Then, I would write a standard contract (with the info from the book applied) and take it to a lawyer and have them review it. Or you may just opt to use a contract that the lawyer provides.
The bottom line is, unless you are very precise, you may as well just operate on a hand shake. A weak contract can be more damaging than no contract (or an implied one).
Jon Blakemore RappahannockINC.com Fredericksburg, VA
That one is for security agreements.Probably more common to contractors is the right to cancel within 3 business days for sales made ouf the normal business place, IE in the home or at a home show.http://www.atg.wa.gov/consumer/cancel.shtmlAlso check the state laws for notices of lien rights and the like that needed to included.
Thank you very much. This is very appreciated.
BjR
Bill,Thanks for catching that, I didn't even notice.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Careful Jon. Some states, like Connecticut for me, requires by statute that all home improvement work be done under written contract. Failure to abide by that law is (1) a semi-criminal offense (not usually prosecuted); and (2) a basis for an award of damages against the contractor all by itself.
CT's not alone. I believe NY also has something similar. Probably a number of states enacted similar laws when it was all the rage among the progressive elite among us a few years ago.
So, advice for everyone: Check before you act. Probably a simple check with your state's web site on the Internet will give you the answer. If not, ask a lawyer. Simple yes or no answer - can't imagine he/she would charge for that (well, maybe some would).Griff
Griff,That was kinda my point. Unless you're very careful you may as well just throw caution to the wind.As to a lawyer charging for answering a question, have you worked with lawyers much?
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Wonder if "we" could start billing for customer questions..
I had a guy call about a week ago now, wanted to know if I could answer some questions for him in regard to a project he's completing at his house on his own..
oh no sir he didn't need someone to do the work, he just needed to know how to do it.
I answered a few quick ones before politely finding my exit.
Maybe I'll try to look up his address and send him an invoice "conciliation fee"
You mean you don't get paid for those type of phone calls?I could tell you how it's done...But I'd have to charge you.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
The beauty of my job... I get paid for the phone calls... but the Company doesn't ;)
It's very rare someone calls in like that... I figure it this way... He's in way overhead and the project is probably a train wreck. So if I can help him out in 5 minutes or less I did my good deed for the week.
And when it fails horribly, and he's screwed, he may just remember the nice guy who tried to help him out and call us to fix his mess, where I can then charge a bit of a premium for the PITA factor...
Sure it's doubtful but I can live in my own little fantasy world.
The boss called his lawyer a while back to find out what our liability might be on some minor thing.... Phone call was about 10 minutes... 3 days later a $100.00 bill shows up.. . "Minimum Charge" Not a bad hourly rate if one could just answer quick questions all day.
I was just looking at your web-site, did you create those news letters or have them professionaly created? Either way they look sharp, have you had much success with them and who do you send them out to?
Edited 5/10/2006 4:35 pm ET by CAGIV
If you have a lawyer that only charges $100/hour - hang on to him/her!Let's not confuse the issue with facts!
no, not an hour, that was a 10 minute phone call... Not sure what is hourly rate is, it was just a min. charge
Neil,
The newsletters were from a company called RT Inc.
We have not done one since the Fall '05 mailer because the response rate was not good at all. I don't think we got one job from them. I've wondered if the content was not specific enough, if it looked like we were too expensive, or just didn't click with people but it was not what I was hoping for.
We've had better luck with the classifieds and even the yellow pages.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
I can and will tell you how it's done:
1. Get a job as a laborer. Pack dumpsters and dig holes, carry lumber and clean up.
2. Move up to apprentice....
Continue 5 or 6 more steps until you are ready to take on whatever project it is you have in mind.
Most of my life. Met one or two since then.
Most attorneys are intelligent. Most understand that they are businessmen. Most want to be successful. Answering a question that they already know the answer for, for free, is good business. And maybe it generates a paying client later on.
You come across anyone who doesn't understand that, attorney or carpenter, use your common sense and pass him by.
Agree?Griff
Griff,When I think of a lawyer answering a quick phone question call for free I can't but help translate that situation into one that I may experience as a contractor.If someone called me up and asked me a "quick" question, I think there is a good chance that their answer will be incorrect because of lack of information. For instance, if someone asked "should I cope my inside corners" I would typically say yes. Of course, if they are installing prefinished crown molding on cabinets I would recommend a miter. Or perhaps they are mixed up and are thinking "coping" is a process used during framing.My point is that just as I could be doing a disservice by answering a seemingly simple question flippantly I think a lawyer's response may have the same undesirable effects. I'm not a lawyer, but my experience with the law has been that there are a multitude of ways to make mistakes in something that, for our purposes, should be pretty much water tight.Maybe I'm going off the deep end, but I just can't imagine a quick phone call to a lawyer out of the phone book would turn out for the better.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
And I always thought coping was just trying to get along. Now, whole new vistas have opened up in my life!
I suppose, with regard to the question being asked, it depends on the question being asked (pun intended). A simple "Must I have a written contract before I begin a home improvement job?" can, I think, be correctly answered by most attorneys off the cuff. They either know or don't know that there is a law in effect (in CT) that requires just that. Most, I suspect, know it because of the publicity it received when enacted as well as from a few notorious, and highly publicized, legal cases that arose shortly after it went into effect.
If someone asked me that, I'd answer "Yes!" immediately. W/o charge. But, if I was then asked "Well, what has to be in the contract?", I couldn't/wouldn't answer. That would take some research to find out what the statute requires and maybe some more research and drafting time to craft something that protects the carpenter and makes sure he gets paid and has remedies if he doesn't, etc. And, I'd probably also inquire whether you had a will, a trust for your kid's education, a retirement plan, etc. Who knows.....?
So, a simple question? Sure, I can probably answer it simply right away. But, you want a dissertation? Well, I'm smart enough to know that I probably don't know the answer, or all of the answer, and that I'd want to be paid for my time. I was, after all, in business for the money. Not for my health. Not for the fame.
Same with you and coping. Depends on the question. Agree?Griff
The Notice of Rescission States something to the effect the client is entering into a contract which will result in a lien being placed on the property in the even they do not pay. It state's they have 3 business days to inform us if they wish to cancel the contract. By federal law we are required to give them two copies of the form if we sell them the job at their house.
I read somewhere a few months back that a contract was deemed null because the contractor failed to give the people that piece of paper.
I have been told if they sign the contract in our office we are not required to give them the form. I'm not a lawyer and do not know if that is true or not.
The standard provisions have been created over time when ever something bites a little to hard that we didn't have covered and I believe our lawyer helped in wording. Stuff like a rock clause if we're doing excavation, a clause for hidden conditions, our time and material rates if we choose to do a small change order T&M, the fact we will put a yard sign up, what substantial completion is etc. I'll try to find the form and attach it later if you would like.
I would appreciate that a lot.
Thanks
BjR
Here is what we currently have.
When the text is shrunk down it fits on a single piece of paper front and back.
I'm going to put a disclaimer on that you not use this or any part of it directly with out having your own lawyer take a look at it. I'm not a lawyer and I didn't create it.
You may find something here of interest. I have used their stuff with good results.
I am in Northern California.
http://www.thecontractorsgroup.com/index.html
There has never been a law to benefit a Contractor.
LewP
Good advice already re contracts with customers.
Contracts with subs are a different thing. If you are carrying liability insurance for your business you need to talk to your insurance broker about their requirements for subcontracts, insurance certificates, additional insured, etc.
Thank you all for the great info and directions. It's quite apparent that I need to take a look at these in more detail and then go see my lawyer for the final tuning of what I need. This is a great start on a very complex topic.
Thanks again
BjR