Contracts used for creating agreement with customer?

[sw_ross]

I'm wondering whether it is common to have a signed contract for planned work with a customer before work is done, I would assume so?

I would assume the contract would layout the specifics of the work to be done (i.e.- rough in wiring for house being constructed or electrical for kitchen remodel), and layout terms for payment upon completion (net 30, etc).

Also, I would assume there's a contingency for change orders requested during work being done (maybe T&M?)?

I would assume that there's some sort of "approval" that is signed after completion of work, so that customer doesn't come back to you and say you didn't do something that they assumed you were going to do?

I'm wondering if there's a "template" that could be created where you fill in the blanks of these particulars...

Of course I would involve an attorney in this process.
I'm just wondering how all of you typically do this.

I'm mostly referring to jobs I do which is residential and smaller commercial (i.e.- lighting upgrade)?

Thanks!

 

[petersonra]

I think you have the right idea on getting your lawyer to help you do this. for small jobs like you are asking about, it probably does not need to be real elaborate. A standard page of terms and conditions that your lawyer can create for you can be appended by reference to all your quotes. Keep in mind that if you are relying heavily on what is spelled out in a contract for a $1000 project you probably really need to rethink your business model. You really need to just be upfront with your customers and make them understand what it is you are offering them and what it does and does not include so they do not get a huge surprise along the way. That is what people hate more than getting a bill for more money. When the contractor says it is going to cost $100 and then presents a bill for $300 there is an understandable annoyance. if you are communicating well with your customer. most times you will be on the same page with him and there won't be much in the way of issues to have to fall back on the written contract to deal with becasue it just won't come up.

I think you may find that if a customer tenders payment for this kind of work that essentially signifies acceptance. but ask your lawyer.

 

[GUNNING]

Contract? We dont need no stinkin contract...

Contract? We dont need no stinkin contract...

I'm wondering whether it is common to have a signed contract for planned work with a customer before work is done, I would assume so?

I would assume the contract would layout the specifics of the work to be done (i.e.- rough in wiring for house being constructed or electrical for kitchen remodel), and layout terms for payment upon completion (net 30, etc).

Also, I would assume there's a contingency for change orders requested during work being done (maybe T&M?)?

I would assume that there's some sort of "approval" that is signed after completion of work, so that customer doesn't come back to you and say you didn't do something that they assumed you were going to do?

I'm wondering if there's a "template" that could be created where you fill in the blanks of these particulars...

Of course I would involve an attorney in this process.
I'm just wondering how all of you typically do this.

I'm mostly referring to jobs I do which is residential and smaller commercial (i.e.- lighting upgrade)?

Thanks![/QUOTE/]

If your job is larger than the maximum amount you are able to bring in a small claims action or do not feel comfortable with the customers ability to acquiesce and make payment then get a contract. I have found that doing a plan and making an estimate makes for larger profits. It helps define the work. A contract you need 3 things the meeting of the minds , a defined time frame, and closure and/or remuneration (offer, acceptance and consideration). I make sure at the end of a project people sign off on the work with a "I hereby acknowledge the satisfactory completion of the above described work". That seals, and closes the contract. A date definitive means "we will start and be completed by".. to understand the scope of the time frame. The final meeting of the minds is the one where I decide if a written contract is needed. Is there some indication that the purchaser for a given amount of work is not on the same page or is using open ended descriptions and cant or wont define the completed project. To me, this is the most important part because it is an indication of who I am dealing with. Are they grounded in fact or is "price is no object" because there isn't any coming your way going to be the result of this encounter. Run, don't walk, away from these. Hiring a lawyer is expensive and is a result of misunderstandings. When in doubt write it down and both sign and date it. Set up a payment schedule and maybe a work time frame. A contract has a reliance part. That is the part where both parties agree to a common goal. There are limits as to how much you can sue for in small claims court. There are minimums as to how much getting an attorney involved will be. No successful attorney is going to defend or prosecute your cause and not make money. The amounts quoted to me are $75k and up. I knew a car dealer in town that would not pay a bill less then $500. He knew it was a voluntary thing and there was very little you could do, except get it above $500 or collect it up front. You have to learn to size up your customer and get a contract together when you need one. Let your competitor deal with stupid stuff while you get out there and make money. I have a friend who is a successful attorney that says I would rather NOT do the work and NOT get paid then do the work and NOT get paid.:slaphead:

 

[active1]

Watch out for state requirements.
Some states have strong contractor boards while others have laws on the books that are not enforced.

The point is there may be state requirements for contractor work over $xxx amount it needs to be on a contract.
With the basic requirements that need to be in that contract.
Or even you may need to provide some homeowner disclosure guides about their rights, who to contact at the state, etc. for them to sign.
Just the same there may be restrictions on payment structures or limits about payments before work.