money paid in a contract?

Status
Not open for further replies.

celtic

Senior Member
Location
NJ
dduffee260 said:
The supply house that supplied it until it is paid for by the contractor.

So if the material gets robbed or damaged on the job site, the SH will just send you over a new batch of widgets?
 

dduffee260

Senior Member
Location
Texas
celtic said:
So if the material gets robbed or damaged on the job site, the SH will just send you over a new batch of widgets?

Let say for instance you do a parking lot lighting project on lets say Utopia Village.

You buy poles and light fixtures from Supply House A. You install the poles and light fixtures supplied by Supply House A at Utopia Village parking lot. Utopia Village is let say, utopian like about the new lights. Only Utopia Village is not well at managing money. They spend too much money on things like food for someone say like Bubbles The Chimp. So, Utopia Village cannot pay for the lights now. You supplied the lights because Utopia Village wanted you to install the poles and lights. In the mean time, Supply House A has the original bill from the factory and has paid that bill, because Supply House A needs to keep a good relationship with the factory. The electrical contractor is not going to pay because they are not their light poles and fixtures !!

After many weeks and months if Letters of Intent to Lein, Funds Trapping Letters, Demand Notices and every effort through Supply House A's attorney, his name could be something like " Justice Swift" or better yet, " Dewey Skruem", he goes after Utopia Villages light poles and light fixtures and gets a court order to either get paid or take possession of the light poles and fixtures.

Well, Utopia Village still cannot pay for the light poles, because Bubbles The Chimp is just too hungry, so there is no way they can be paid for. Now Supply House A is fed up and want action, so they hire out RepoJoe Electrical to go pick up the light poles and light fixtures from Utopia Village. RepoJoe Electrical gets paid to bring back the light poles and light fixtures and delivers the repossessed materials back to Supply House A.

So now, who has been the banker through all this trip to fantasy land?

Who made the most money of all of the parties involved? Well that is easy. We all know that " Dewey Skruem" always drives the fanciest cars and lives in the mansions, so " Dewey Skruem" came out the best of all the parties involved. Just a note though, Bubbles The Chimp did not make out too bad himself.

The names have been changed to protect the innocent.
 

celtic

Senior Member
Location
NJ
Lets say we get a significant amount upfront, progress payments as per contract and avoid all the drama?
 

dduffee260

Senior Member
Location
Texas
celtic said:
Lets say we get a significant amount upfront, progress payments as per contract and avoid all the drama?

What size of project are you planning on and what is a significant amount? Some homeowners may pay up front. We do not work on houses.
 
Business is a gamble. The customer is gambling that you are as competent as you seem and will give him a quality job. You are gambling that the seemingly honest customer will not find some obscure angle that will allow him to skip out on paying you. The stakes are his project may not come out the way he envisioned. Or you will not be able to pay for your materials, and therefore will not will not be allowed to obtain more for other jobs, to make up for your loss on this one. Let this happen enough times, and you can no longer feed your family. Your risks far outweigh his. Good contracts protect both the consumer and the contractor. I dont gamble with my family's well being. I get 50% up front, 25% after the rough inspection, and 25% plus any added extras after the final inspection. I don't have any trouble with customers complaining about the deposit. But I make sure that if he defaults, I only loose potential income, not the cost of material or permits. Gamble with his money. In the end, Its the only insurance you have.
 
On new reisdential construction we always break the contract price into three draws: Electrical Service (15%), Rough (65%) and Trim (20%). We usually install the service right after the foundation is back filled. 15% contains a little bit of front load but not enough to offend anyone. I also stipulate that I am not responsable for abtaining any permits. At least in Illinois we are not required to obtain them. We just need to be registered, etc.
 
Status
Not open for further replies.
Top