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Contract Terms?
This thread has 17 replies. Displaying posts 1 through 15.
Post 1 made on Friday May 24, 2002 at 21:34
Kristen
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18
Is anyone willing to suggest or share wording on a contract to protect me from numerous trips to the customer's home to re-program after they do something to mess it up, or when I get there and discover that there is nothing wrong but their ignorance or they decided to see how it all work and accidentally disconnected a component or reconnected it to the wrong jack? I am looking for some friendly wording to make it clear that anything after my initial training that results in my having to spend long telephone conversations or trips to their home that are not related to faulty product or installation will be their responsibility to pay for. In other words I don't want my "warranty" of the product to be misconstrued.

Any examples or suggestions?
Thanks
Post 2 made on Friday May 24, 2002 at 21:44
Matt
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Welcome to the world of custom installation. Some of these trips are just 'expected' by the customer. Plus, you should have made enough on the project to have a couple gimmie trips included.

Otherwise, just send them a bill and when they call and complain, credit it a couple times. They will get the hint after two....
Post 3 made on Saturday May 25, 2002 at 16:38
QQQ
Super Member
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Kristen:

I can't share out contract but I hope the following is helpful.

1. Attach a section to your contract titled "What is Included".

2. Attach a section to your contract titled "What is NOT Included". This section should start with a statement to the effect of "this list is not all inclusive and is simply meant to clarify certain items that are NOT included in the bid". This is the section where you can list things such as service calls due to pilot error.

I want to add a qualifier that IMHO part of the reason for pilot error in SOME instances is poor system design (the system is too complicated to operate). In SOME instances, it is all to easy for us as designers/installers to blame things on pilot error.

3. Here is one of the best articles I have ever seen on proposal/contract writing - [Link: msa-design.com].

4. www.proposalworks.com

You are on the right track. A well written contract can save a company thousands upon thousands of dollars and is also in the best interests of the Client because it helps to clarify issues at the beginning of the project instead of the end.

I hope this helps. Good luck.







This message was edited by QQQ on 05/27/02 00:49.08.
Post 4 made on Saturday May 25, 2002 at 17:41
Larry Fine
Loyal Member
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5,002
Qx3, Excellent advice, and great articles. Thank you!

Larry
www.fineelectricco.com
Post 5 made on Sunday May 26, 2002 at 10:46
Sheik_Yerbouhti
Founding Member
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401
Kristen:

In another thread I suggested making an editable "boilerplate" for an instruction/operating guide. Whether you do that or not is your business, but if you do you could reference the fact that "operating instructions have been provided" somewhere within the boilerplate of your contract, specifically your disclaimer area. Kind of an "I told you so" up front. That way if they kybosh something by going contrary to your intructions you have more ground to stand on when you say "pay me, or learn to fly". I'm in the IT industry and once in a while you just have to push someone out of the nest after repeat episodes of supporting the same (self-induced) problem. Your main problem is going to be with people who "fib" about what they've done. They will be (and probably already are) showing their stripes.

It goes like this:
Did you reboot the computer?
"NO, it was like this when I walked up to it."
Did you see a blue screen for moment?
"Yes, I did. What was that about"
(They obviously rebooted the computer.)

Did you reset the Pronto ?? "No, it was....."



This message was edited by Sheik_Yerbouhti on 05/26/02 10:56.13.
You are transparent! I see many things;
I see plans within plans. The Spice must flow!
OP | Post 6 made on Sunday May 26, 2002 at 23:37
Kristen
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Thanks for the input so far. I have not had any problems with this as of yet, but I can see the potential. This is why I am asking the questions now.

I agree with the advice to have an "includes" and "excludes" portion of the contract, this is already in mine. I will definately add a clause about the instructions that I have provided them with already (which I also already do).

I too, have paid an attorney to write my contract for the standard electrical that we do. This is why I asked if anyone would be "willing" share. I understand how "protective" we are about contracts. I was just hoping to make some revisions to my existing practice without having to call my attorney again. I will probably end up calling him though because a well written contract is worth its weight in gold. :o)


Thanks again.
Post 7 made on Sunday May 26, 2002 at 23:50
Eric Johnson
Universal Remote Control Inc.
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705
Kristen,

Let's not forget. The path to success is based on pleasing the client. Don't try to win this in court. You can simply say in your contract:

"Any change from this proposal will have to be separatly approved by you."

Then at an early time in the process (every customer changes things), introduce the change order, estimate the change in the overall cost to the client (could be a lessening of the overall bill or it could be an increase), and get them in the habit of signing for changes.

Guys, this is not rocket science. You do not need to spend thousands of dollars on an attorney. A good attorney will tell you that good practice is worth a million dollars in legal fees. Don't set a precedent by allowing "a couple of gimmie trips" to be included.

Any good contractor sets accurate estimates, works to complete the job satisfactorily, and bills the client for any changes. That is life...

Don't spend excessively on having your contracts rewritten. Be obsessive about pleasing your clients and being completely fair with them.

Remember, you are worth spending money on! Your abilities and skills are valuable. Stomp out the idea that any amount of money spent entitles a client to freebies. Money spent = Great Performance and/or Great Ease of Operation. It does not equal "gimmie trips"!!!

Best Regards,

-Eric

Eric Johnson
800-247-7001
www.hometheaterpro.com
Best Regards,
Eric
Post 8 made on Monday May 27, 2002 at 00:51
QQQ
Super Member
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Kristen:

I modified my first response a little bit and I am sorry if it came off as "stand-offish", which I suspect it might have. When I get a chance I will post some ideas about some things you might want to include.
Post 9 made on Monday May 27, 2002 at 01:54
QQQ
Super Member
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On 05/26/02 23:50.49, Eric Johnson said...
Let's not forget. The path to success is based
on pleasing the client.

I couldn't agree more.
Don't try to win this in court.

I think I know what you are trying to say here but I couldn't agree more with Kristen's statement that a good contract is worth its weight in gold. In the most extreme circumstances, a good contract can mean the difference between going out of business in a nasty lawsuit versus experiencing 0 loss.
You can simply say in your contract:
"Any change from this proposal will have to be
separately approved by you."

I have no disagreement with your statement but one of the huge issues that a contract can clarify is "what is a change". In many instances the answer to this question is by no mean obvious, at least to the client!
Then at an early time in the process (every customer
changes things), introduce the change order, estimate
the change in the overall cost to the client (could
be a lessening of the overall bill or it could
be an increase), and get them in the habit of
signing for changes.

Brilliant advice, IMHO.
Guys, this is not rocket science.

It may not be rocket science but it isn't simple either. A good contract takes a lot of time to put together and should always be a work in progress, in the sense that it should be "upgraded" when appropriate to adapt to new situations or lessons learnt.
You do not need to spend thousands of dollars on an attorney.

I recommend that people study contracts such as the one I published a link to earlier and then write as thorough a contract for themselves as possible, trying to address all issues they believe are pertinent. Then give the contract to an attorney for review and suggestions/improvements. If someone doesn't have the extra funds available to pay an attorney, then I suspect a good "self-written" contract is probably much better than none at all.
A good attorney will tell you that good practice
is worth a million dollars in legal fees. Don't
set a precedent by allowing "a couple of gimmie
trips" to be included.
Any good contractor sets accurate estimates, works
to complete the job satisfactorily, and bills
the client for any changes. That is life...

Don't spend excessively on having your contracts
rewritten. Be obsessive about pleasing your clients
and being completely fair with them.

Remember, you are worth spending money on! Your
abilities and skills are valuable. Stomp out the
idea that any amount of money spent entitles a
client to freebies. Money spent = Great Performance
and/or Great Ease of Operation. It does not equal
"gimmie trips"!!!

I mostly agree and again think you are giving some really great advice.

p.s. Here is one simple example of a clause that one of our clients tried to have his attorney include in our contract. It went something to this effect: "If the client must terminate the contract, the client will obtain bids for completion of the job. In the event that the cost to complete the job is greater than the amount owed to the contractor, the contractor agrees to pay the difference to the client. In the event that the cost to complete the job is less than the amount owed to the contractor, the client agrees to pay the difference to the contractor". I told the attorney I admired his attempt to include the clause, but NO THANKS, I preferred not to sign my business away (how often do you think the cost to finish a project terminated mid-way would be less than the cost to complete it based on the original contract).







This message was edited by QQQ on 05/27/02 02:11.37.
Post 10 made on Tuesday May 28, 2002 at 09:08
Rob Grabon
Founding Member
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1,392
The best advice I ever received about contracts, "Contracts are for lawerys, and when dealing with the rich, they can afford a better lawyer than you."

The best when to win in court is to keep out of court. Keeping a client happy and being honest is the best defense. Contracts are a good idea, generally only the most obnoxious guy will take you to court and then becuase he can win. You will recognize hime in the first meeting and the smart money is to pass on his job.
Technology is cheap, Time is expensive.
Post 11 made on Tuesday May 28, 2002 at 14:44
David Dryden
Founding Member
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October 2001
88
Along these sames lines... I'd like to know what different methods of billing that everyone uses. For example, I have usually billed in three to four installments; deposit, completion of pre-wire, completion of trim-out, and completion of final equipment installation. Anybody have any other methods/ideas? Just looking for a better "mousetrap"!

David
Post 12 made on Tuesday May 28, 2002 at 21:40
QQQ
Super Member
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Deleted due to posting problems.



This message was edited by QQQ on 05/28/02 23:57.16.
Post 13 made on Tuesday May 28, 2002 at 21:47
QQQ
Super Member
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January 2002
4,806
On 05/28/02 14:44.02, David Dryden said...
Along these sames lines... I'd like to know what
different methods of billing that everyone uses.
For example, I have usually billed in three to
four installments; deposit, completion of pre-wire,
completion of trim-out, and completion of final
equipment installation. Anybody have any other
methods/ideas? Just looking for a better "mousetrap"!

David

David,

May I ask if there is something you are specifically trying to improve upon? More payment? Fewer payments? More money up front? Less money due on the final payout?
Post 14 made on Tuesday May 28, 2002 at 23:55
QQQ
Super Member
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January 2002
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On 05/28/02 09:08.51, Rob Grabon said...
The best advice I ever received about contracts,
"Contracts are for lawerys, and when dealing with
the rich, they can afford a better lawyer than
you."

That is like arguing "why bother to put a security system in, if they really want it they will find a way to get it". And contracts are not just for lawyers, a good contract is an indispensable aid to clarifying an agreement between and protecting the interests of BOTH parties.
The best when to win in court is to keep out of
court.

That is exactly one of the many things a good contract can help to do, on many different levels. On the most basic level a contract can have a clause that requires both parties to attend mediation before resorting to a lawsuit. Furthermore, the purpose of a contract is NOT merely to protect oneself in/from a legal "showdown". Contracts can address everything from job quality to warranty terms to client confidentiality to project scheduling. And on many jobs a thorough contract is not only expected, it is required.
Keeping a client happy and being honest
is the best defense.

Of course you should offer great customer service and of course if you do your job right you are less likely to have unhappy customers and get involved in lawsuits. That does not mean you shouldn't have the best contract possible. It is the very ESSENCE of GREAT CUSTOMER SERVICE to offer your clients a well written, thorough and easy to understand contract.
Contracts are a good idea, generally only the most
obnoxious guy will take you to court and then
becuase he can win. You will recognize him in the
first meeting and the smart money is to pass on his | job.

Most of the time you WILL recognize him/her in the first meeting and if you do I agree that you should pass on the job. But if you think you will ALWAYS recognize them, then you belong on a Pshycic Friends Network because you WON'T. Not to mention the instances where you start out working with one person on a job and end up working with a completly different person (Russ Hershelmann often tells a story about starting a project with a very sweet woman who's highly litigous boyfriend later ended up taking over the project).
Post 15 made on Wednesday May 29, 2002 at 08:57
David Dryden
Founding Member
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October 2001
88
Basically, I'm just wondering if my billing methods are falling within the "norm". I've always done it this way, and wanted to know if anybody does anything much different.

David
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