Hey, I’m still a little new at this working on my own thing. Something I read in one of these posts got me a little nervous. Actually alot nervous.
Ive been working without a contract between myself and the client. Ive shown them the numbers, collected and check for a portion, worked out a payment schedule, shook hands and went to work. Seemed pretty simple to me.
I know now im in need of a contract. something to protect myself and the client.
Other than sitting down with a lawyer ( which can cost ya a pretty penny ) Could I get some ideas from you seasoned guys who actually know what your doing.
Thanks.
Replies
You may not need a contract if you quoted an hourly rate and are being paid that way, and your client is paying for all materials.
If that is the case, you are simply the client's employee. If the client stops paying, you stop working.
Simple.
Gene, I think that's questionable advice unless you know about construction contracting and licensing law in MN. Some states require written contracts. Also, without a contract the contractor's warranty responsibility is not limited in writing and is subject to interpretation by the courts. Without a contract the contractor may be failing to correctly notify the owner the contractor's lien rights (which may therefore not exist). And of course there are all the practical business reasons for having one.
How many gory threads have we seen here where someone gets stiffed on a job and it turns out there is nothing in writing (or worse yet, there is an inadequate contract). I think a good lawyer could make a 'contractor' (rather than an employee) out of anyone who works for several homeowners a year, advertises their business, etc.
Faustie, get yourself the good book that Gene and I both have, the JLC Contractor's Legal Kit. Also get David Gerstel's book 'Running a Successful Construction Company'. Read both and decide what to do next.
David, I knew others would chime in here with sage advice about contracts, lawyers, and the value of the JLC Contractors Legal Kit.
But I wanted to offer the simple view, the one that may exist when he is working solo, paid an hourly rate, and not "selling" any materials, fixtures, or products.
It is the view that springs from the discussion that pops up here on Breaktime from time to time, the discussion that looks at all sides of the "employee or contractor" issue. You know . . . 1099s versus W2s, to have or not to have workers comp insurance, yadda, yadda, yadda.
And then, there is all the business about licensing, permits, etc. It can get real complicated.
Edited 3/22/2005 10:53 am ET by Gene Davis
I have and use the JLC Contractors Legal Kit. Best $60 I have spent. I can tailor make a contract to what I am doing quickly. Jeff is right the only thing you are doing is giving a court something in writing that everyone signed to sort out. But I also think when you have a contract you make everyone involved feel a little more responsible/cautious so generally everyone gets along better. Just my opinion.
I have a short 1 page contractors agreement I use for stuff under 2k and anything in the $500 or less area we do use a handshake agreement. DanT
faustie... i use a one page contract..
but i f i were you..as dant mentioned, i'd buy the "Contractor's Legal Kit" by Gary Ransome..
gives a pretty thourough overview of what you need to know
Mike Smith Rhode Island : Design / Build / Repair / Restore
GOOD IDEA!!!!!
Reading books is a great idea, but working with a lawyer experienced in the field (construction/architect/contractor liability) is worth the money. You can get your own form contract and a discussion of what to do and not to do in filling in the blanks for a few hundred dollars - it'll pay for itself the first time you have a dispute with a customer. If you want, I'm sure you could find a qualified lawyer willing to barter for her work.
Believe me, amateur legal work can get someone in at least as much trouble as amateur construction work.
For what it's worth - you ARE working with a contract, just not a written contract. Proving the terms of the agreement can be tough, but it can be done.
Edited 3/22/2005 10:19 am ET by johnnysquire
I would not meet with a lawyer, yet. Lawyers can be helpful, but not so much when you are so new to the business. Before you speak with a lawyer, you need to define what you want to discuss. Otherwise your meeting will lack focus, you will not understand what he is offering you and you will not know if what he is offering you serves your needs.
Instead, take a few hours, 3 nights a week for the next month or two. On paper or on the computer, discribe what you think belongs in a contract. Then start thinking about how the contract is organized. Then consider the wording. Practice writting contracts for the current job and past jobs. With those, you will have the benefit of hindsight. Great! This will help considerably.
Bring a copy of a few contracts - even if they are hypothetical or are for jobs which you only bid on. Let the lawyer critique them and get an understanding of exactly the type of work you do. Then he will know how to protect you.
But, just because you involve a lawyer, don't for a moment think this will make your contracts perfect, bulletproof and timeless. I have found that my contract format and wording has evolved over time. I have made mistakes. These have been addressed subsequent contracts. You need to constantly improve them.
F
contracts are just something written down that describes what U will and what U won't do for a stated price.
So just write down on paper what U will build with your hands.
If there's an obvious "exclusion" .. note that as excluded.
Then ... give the price and payment terms.
have a space for both U and the customer to sign.
the whole point of a contract is so the magistrate or who ever U go infront of to sue knows where both parties were from day one. Personally, I don't think a lawyer is needed. Magistrated can read and understand logical thinking. Just write it logically ... and yer set. Now a million lawyers will come in say I'm wrong ....
BTW .. a verbal contract is just as binding as a written ... just harder to "prove" ... hence ... the written. Take the verbal idea ... and get it on paper ... signatures just mean both parties have read that paper.
There are lots additiona U can eventially put into a contract ... but if right now U are working verbal ... I'd take the next step and put that "verbal" down in writting. Nothing fancy .. nothing complicated. just the facts ... nothing but the facts ... and all the facts.
The biggest problem with a basic written contract is someone can take what's "not" in there and say it was supposed to be. You priced and wrote it up for a fence.
You wrote ... build "over there" .... that say .. I thot "over there" meant build me a new house ... 'cause I've always wanted one "over there" ...
So ya gotta write "fence" .... and having the length and height and materials etc will help confusing "fence" with "house" ...
see .. simple.
Jeff
Buck Construction
Artistry in Carpentry
Pgh, PA
This is one resource that I really value. The advice and tips from everyone is incredibly helpful to those of us that at least ask for it.
Thanks to everybody. not just for this little advice but for everthing ive read before.
I am an engineer, not a contractor or lawyer, but I was required to take a contract writing class in college. As this is the second time it has been poseted I wanted to comment on "a verbal contract is just as binding as a written". Verbal contracts are binding as long they fall within certain parameters:
The is only binding if the stated duration is for 6 months or less;
The contract is only binding it is for goods and/or services valued under $600 (this includes the value of bartered or traded services);
The contract is not inherently illegal
Chances are that you are working for more than six bills. I would get something in writing. Blame it on your insurance. Insurance agents are great scape goats
Good example of why talking to a lawyer who works in the field is a good idea - in Pennsylvania a written contract is required for the sale of $500 (not $600) in goods (not services), or for personal services that require more than 1 year (not 6 months) to perform. When the contract is for mixed goods and services, the predominant aspect controls rather than the value being apportioned between the two. There are additional requirements too - you can't sell real estate interests without a signed writing (except leases under 1 year), and so on.
At least that's what the law was the last time I looked, which is probably since you got out of school.
one good thing about getting screwed out of money early on....
Makes me very carefull in dealing with all of them. Theres the good home owners , the bad home owners.. and the ugly.
Check into AIA [American Institute Of Architects] forms. They offer a range of pre written contracts that will fit a lot of different construction scenarios, everything from remodel to design build. they are boiler plate enough to be usefull and flexible enough to be specific
warning, warning.........do not use aia contracts.............warning, warning!!I Love A Hand That Meets My Own,
With A Hold That Causes Some Sensation.
[email protected]
I second that motion.
AIA contracts are pro architect.
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
Faustie,
If you don't have any idea where to start, the state of Maine has a contract and change order form on their web site that they recommend for contractors. It's not as detailed as you'd like, but it's a good starting point.
http://www.maine.gov/ag/?r=clg&s=chap18#18.4