Sorry if this has been asked before, and I know that I need to talk to an attorney in my area, but does anyone use the contract forms from “The Contractor’s Legal Kit” (JLC)?
Larger projects have made me consider using a more formal contract, but I don’t want to scare off clients with “too much information” , or have them thinking I am paranoid about being sued.
Just wondering if people use these forms with minor modification or if there is a lot of “boiler plate” that needs to be adjusted for my situation?
Any advice appreciated.
Replies
i use one. then i sit down with customers and add in or take off what we want. haven't been sued but its worked well so far.
My contract started out as one from that book/package. It's evolved from there over the past three years or so, but a good deal of the 'standard' stuff is verbatim. I've added some things that are required by my state law, a few things I've come across in other contracts over the years, and a few things my lawyer-man said should be added. Print it all out on company letterhead and it's a pretty fine looking thing.
I have the kit and use it regularly. I use the short contract the most. Well worth the price and you can modify it, delete or add stuff to your liking. DanT
Thanks, glad to see others use this as well.
I just finished modifying the cost+ contract. Went from 13 pages to 9 (though I think partly due to font size and page breaks) will have the attorney review for content/comment.
Our current standard contract was developed by my attorney who specializes and is very experienced in construction law. I asked him to develop a standard contract for our work with fill in the blanks as necessary. He presented a contract to me (about 25 pages long with attachments for specs, plans, schedules, payment terms etc) and after a quick review we went through the contract sentence by sentence and I had him explain
1. what each sentence meant
2. how does this protect me?
3. how does this protect the client?
4. Is this required by law-if so what law and where is that written.
5. Is the contract any weaker or what is my risk if we remove this item?
6. Is this equally fair to client and contractor? If not who is more protected and what are the risks for the weaker party?
7. If there was a legal term that was incomprehensible or $100 word that I did not know I asked if we could change it to make it easier to understand.
This effort got the contract down to 8 pages with almost five being statements required by Texas law for residential home construction. I can now comfortably review the entire contract with my client and without hesitation say it is a fair contract, meets all state and federal laws. I explain how each clause protects me and protects them and if necessary why the sentence or paragraph was in the contract.
The contract has passed the review of multiple banks and lending institutions and several clients attorneys. No problems yet.
This effort cost me about $2500. I know the contractor's legal kit is pretty good, but I feel so much better knowing
1. Exactly what is required by state and federal law
2. I have a contract that is easy to explain to my clients and I have no hesitation explaining each and every paragragh and why it is necessary and how it protects the company and the owner.
3. I have a solid contract that is readily defensible if necessary (hopefully never).
At the time I decided to do this I almost fell over at the $2500 quote, but I now feel it was a valuable and worthwhile expenditure.
I was astonished at the extent of requirements set forth by the State such as accounting and banking practices and until that time had no idea the 3-day right of recission was applicable to my contracts. I also found out that there was alot of repetition of statements. We eliminated most of the repetition. It was kind of a fun exercise and it certainly was challenge for my lawyer. We are both better for having done that.
I would encourage you to get a good lawyer so you understand the laws that directly affect your business... you may be suprised at what you didn't know.
Bruce
Edited 9/6/2006 11:48 pm by Hiker
Great post.
Thanks Dave
My father did all his work on a hand shake. When I started, I had a one page DIY contract. I was convinced that I could sniff out bad clients and I could avoid being in a bad situation by just doing good work for good people. As the business has grown, I realized I had a lot to lose if one dirtbag gets in the mix and I needed to protect us from that person. You hear the stories, see the headlines and it becomes even more apparent how common dirtbags are.
I have been fortunate that we have only had one bad client in terms of getting paid and that was managed by a letter from my lawyer that made me cringe. A two hundred dollar letter got a $18,000 check the next day.
Based on the contract development experience and my one collections problem, I have found that having a good lawyer, a good accountant, a good banker and a good insurance company is just as important to my business as having quality tools. All these folks are part of my toolbox. I do not go to work without them and I sleep much better at night. The other critical part of that toolbox is the experience and insights gained here at Breaktime. Thanks for all the great info and keep it coming.
Bruce
I have found that having a good lawyer, a good accountant, a good banker and a good insurance company is just as important to my business as having quality tools. All these folks are part of my toolbox. I do not go to work without them and I sleep much better at night.
excellent advice, and very well put.
SHGFor every complex problem, there is a solution that is clear, simple, and wrong.
-H.L. Mencken
Hiker,
Thanks for the advice. I am going to print off the questions you included in your post and keep them with me when I meet with an attorney.
I would like to get the same comfort level you have, so that when a prospective client questions if a contract is really necessary, I can explain that it is fair and is required by law.
Vin
and is required by law.
Is it required by law? I'm from Iowa and headed back there but I didnt know that it was a law that you had to have a contract.
I always use contracts or written bids but just wasnt aware of the law thing.
Doug
Doug,
I guess I worded that poorly. I don't know what Iowa law says, but I have a meeting with an attorney on Monday to discuss the contract.
I'll find out the details then.
Thanks
Its just something that I wasnt aware of and maybe should be.
Doug