Friday, September 6, 2013

Get It In Writing

One Ringy Dingy
Two Ringy Dingy
"You've reached the Surfaces' law offices of Hooke, Lyne, & Sinker. How may we help you?"
"Oh Hi! I have this client and when I gave them my bill they started arguing with me on the price. And now I've been waiting 2 weeks for my payment! What should I do?"
"Did you have a contract?"
"Well no.  I only gave them a price before the job."

"Wait while I transfer you to the firm of Grin & Barrett."
Working without a written contract is a little like doing this:
without this:
I had a client once express surprise when I presented him with my contract to sign.  He said his handshake was his word. I said, "Then I will go into your liquor store and just give the cashier my handshake. If the wine is good, I will come back and pay for it." He signed the contract. He was  totally a pain. But I did get paid. BECAUSE I HAD A WRITTEN CONTRACT.
You don't need an attorney to draw up a contract-most of the time a dispute will not get that far.  But putting your expectations in writing will save you many misunderstandings and give you a signed agreement should the issue go to litigation. Plus it makes you look like a professional business person. So what should be in your contract?
Start with a heading. This should be the name of your business followed by the document title.
Example: Surfaces Fine Paint & Decorative Arts Studio
Terms & Conditions

Briefly re-outline the scope of the work you presented in your bid.  A detailed bid of your work including labor/product pricing, work schedule, and completion dates should be submitted before you present a contract for signing. In this section include your policies regarding sample boards, surface preparation, insurance, hours, and guarantees.
Living area bid prepared for Smith Family Residence. Prep and faux finish per approved sample boards for 800sq.ft. at $7.50 per square foot = $6,000.
Deposit: $3,000. Balance due on job completion.
All boards and sketches are the property of Surfaces Studio and may not be kept by client. Swatches are available for decorating purposes. All materials and labor guaranteed specified in the accepted bid. All work to be completed in a professional manner according to standard practices including hours on site (8am-5pm), safety, and the respect of personal property.  Workers are insured.
Our finishes are guaranteed for normal wear over walls/cabinets prepped to Surfaces Studio standards. Surfaces Studio does not guarantee finishes applied over pre-existing wall paper or paint applied by another company/individual. We will make every recommendation possible to ensure a satisfactory and long-lasting finished product.
It is always helpful to define Normal Wear for your clients. I would do this in an attachment called "Care of  Your Finish." Normal wear is exposure to body oils, cooking, cabinet closing/opening, dripped water, and bumps. It is not a leaky shower, cutting with a knife, kicking the wall, or putting a golf ball. Include and outline covering curing instructions and cleaning recommendations.
The next section came in very handy.  A gentle reminder that you are there to work.
Instruction in faux painting techniques is not offered through this contract. Client agrees to limit interruptions and questions regarding techniques and materials to normal inquiries regarding color choices and material properties (i.e., wash ability, safety, and durability.) We will provide the client an outline of the day's activities on arrival and a summary of work accomplished before leaving each day.

Outline what your contract does not include.  Clients will assume you are a moving van, cleaning company, babysitter, and dog walker.
The bid and contract does not include:
Moving or removing furniture, drapes, or rugs from the area.
Disconnecting electrical equipment such as lights or stereos.
Removing pictures or mirrors or rehanging.
Cleaning ceiling fans, windows, or accent molding.
Moving appliances such as refrigerators, washers, and dryers.
It is important to acknowledge the unexpected and explain how you will handle it. Expect the Unexpected.  It is not like the Spanish Inquisition (Monty Python joke).
Our proposal represents a GOOD FAITH ESTIMATE. All aspects of the job were considered. However, occasionally unforeseen issues arise that require more time and material.  These unforeseen circumstances may carry an additional charge. Surfaces will do our best to keep the client informed of potential additional charges. Telephone and estimates made without measuring or visiting the site are purely speculative. Final price quotations are only for work produced according to original specifications. Client additions, revisions, changes, and alterations will carry additional charges determined through a written addendum. Project issues directly related to work performed by Surfaces will be corrected by Surfaces at no additional charge to the client.
You need to lay out a payment schedule.  Some people do a 1/3 to schedule, a 1/3 on the first day, and final payment on the last day.  We charged 1/2 or 50% to schedule and order product and final payment by one week after the job was completed. And there should be a penalty if someone doesn't pay.
Unpaid balances following job completion will be charged 1% of the total bill in a service charge per month until the full payment is received. In the case of client default of payment, the client agrees to pay in addition to sums under the signed contract, reasonable court costs and fees incurred by Surfaces Studio in the collection of outstanding monies. Interest charges shall continue to accrue over the coarse of collection, including periods pending litigation where there is adjudication against the client.
But you also have to spell out what responsibility you will take if something happens to you.
In the event that Surfaces Studio may not complete the job within agreed upon time frame due to unforeseen illness or injury, the client will receive a full refund for areas not completed.  Surfaces will make every effort to find a qualified replacement to complete the job.
Add a liability warning! I added this after I came in one morning to find the client's 6 year old kid on top of  3 stacks of scaffolding!
Warning. Dependent on the job, scaffolding may be set-up and left in your home/work for the duration of the job. It is your responsibility to keep children from climbing or pushing equipment. Surfaces is not responsible for you or any other individuals using our scaffolding, ladders, or equipment. Every effort is made to store equipment and product in a garage, unused room, or out of the way storage area.  
Finally, you have to state that this what you and your client are signing in a binding agreement.


Terms and Conditions. The terms and conditions of this agreement are binding in their entirety between the client and Surface's representative upon the signature of both the client and Surfaces. The agreement is amendable with a specific written agreement signed by both parties.  Please indicate that you have read the agreement and understand the stated term with an authorized signature.  Your signature is also authorization to commence work. A copy of  this contract will be provided for your files.
Provide a line for client's signature and date. The scheduled work dates. And a line for your signature and date.  I would go over each section with the homeowner to make sure they understood it and answer any questions. You really need to do this face to face. It will reassure them that you have not had problems in the past and don't anticipate problems on their job either.
We made every effort to get our contract with the homeowner and not the builder or designer. You want the person most impacted by the work to be responsible for paying you. In the event a builder or designer asks you to sign their contract, read it very carefully and don't be afraid to flag and question areas you don't understand. 
Anyone that doesn't offer you a written contract or refuses to sign one is giving a BIG RED FLAG.   In my 18 years of contract work, we only had to threaten a lawsuit one time.  And it was resolved to our satisfaction within 2 weeks.
If you don't get a signed contract, you might as well do this:




1 comment:

  1. What advice would you give for payments arrangements on a particularly large project that will last anywhere from 6mos to a year?