I’m a newb. When working for homeowners, what’s your policy on written contracts? Like, regarding little stuff.
I don’t think a CONTRACTor can underestimate the importance of being specific in a contract for something complicated like a kitchen remodel. But let’s say I hired someone to paint a room, and he whipped out his five-page package describing payment schedule and job specifications, and I’d think he was out of his mind.
I wouldn’t necessarily expect any documentation at all.
Where do you draw the line? Or do you? Would you actually have a slip of paper that says “I, the undersigned will paint the room for $xxxx” or whatever? If so, how simple do you keep it?
Replies
Bill,
I use a personally written 2 page contractor agreement for jobs from 1-5k, I use a full blown contract for anything above that. I generally use a handshake under a grand.
Once a contract is signed no changes happen over $50 without a change order signed, 2 copies, one for me and one for the HO. If you want copies of what I use email me and I will send them to you. 9 year and worked so far! DanT
When dealing with a new customer I always use a short form contract unless it's truly a quikie handyman-type job and I'm done in an hour or so.
My short contract specifies the hours I'll be on site, a customer supplied material disclaimer, payment is expected at completion of the job, etc. Plus, I get to attach a copy of my insurance certficate...all this stuff seperates me from 99% of the 'drywall bucket of tools and beat-up pick-up truck guys'. If they become a steady customer a contract is only used for bigger projects.
For your room painting example, I always use a contract. It eliminates any guesswork as to who's going to move furniture, antiques, the big screen TV (and who's responsible for damage), finish quality level (just because I'm painting the room doesn't mean I can eliminate wavy plaster walls in your in 1850's colonial), my responsibility for custom color selections or color matching...in my experience, painting is one of the small projects that demands a contract.
-Norm
You should always have a contract. Key elements:
It should describing the exact scope of work, the price and payment terms. If dates are critical, include them, and indicate "Time is of the essence."
It should include a disclaimer indicating that the price is subject to change if conditions discovered after work starts result in a change in scope. (And you should make it a practice to document ALL changes prior to doing them.)
It should include a provision for a service fee (like 1-1/2% per month) for unpaid charges. If you can, it's a good idea to incude a provision that the HO will pay legal fees and costs if collection becomes necessary.
The contract should have an "integration clause" -- "This is the entire agreement between the Contractor and the Owner. No changes to this contract are valid unless in writing signed by both parties."
If you offer any guarantees, put them in. (It's amazing how, when you verbally say "one year", the homeowner hears "lifetime".) If there is no guarantee, clearly state that as well.
A lot of contractors will forego the contract thinking it isn't worth it for a $500 job. If they don't get paid, it ain't the end of the world, right? However, this overlooks the fact that, by doing any work in someone's home, you may be subjecting yourelf to liability down the road far in excess of the value of your work. I've heard lots of horror stories where homeowners insisted on a half-azzed job, and then later sued the contractor for repair costs because, eg, the sill rotted out. Even if you win those cases, it can cost you thousands just to defend yourself. A good contract up front makes that law suit less likely and makes your lawyer's job WAY easier if it should happen. (In situations like this, it's also a good idea to note in the contract that you advise X work, include a price, and give the HO the option to initial "YES" or "NO" for that line item -- like they do for the damage waiver insurance at rental places.)
Paperwork's a biatch, but it'll bite ya sooner or later if you're not careful about it.
Mike Hennessy
Pittsburgh, PA
Check the law in your area. Where I am (New Jersey), the law requires a contract for anything over $500. I understand that's to protect the customer, but most of them are unaware of it.
I have such a regular customer base (even after only 6 years of doing this) that I rarely write up contracts at all. Most of my jobs are several days in duration and I don't even ask for payment until I'm done. A contract can't offer them greater protection (at least financially) than that.
When I do write up a contract, it looks more like a bid. The work is described and the amount is listed, but I don't include a payment schedule. I ask for 1/3 up front on larger jobs and then the I fill in the bid form with their deposit and sign it. That then serves as a the contract... sort of.
I did just order the Contractor's Legal Kit from Amazon because I do have a few larger jobs coming up and I want things to look a bit more professional.
I've never had a serious incident yet, but there is a tendency toward confusion about what is included in a job price.
Customer hires me to do jobs A and B for x price. While your here, let's do C and D, wait a minute, we want also E and F. Who said what at what price when? What work exactly was included in A and B to begin with.
On most jobs, I write out a sheet of paper detailing the scope of work and payment terms at least.
I need to get a contract written up to use. I've had the same reservations about using one you have, but I think it could be a benefit for the customer to know exactly what is going to happen on their job. If presented in the right way, it could give an image of a professional who thinks things out.
A forty page contract would be ridiculous, but if someone scoffed at a simple one, I would be suspicious.
We are handing out about 8 pages on a contract in #10 font. That same 8 pages is condensed and is written in small print on the back of a small job form. The language has been reviewed and approved by a local attorney.
Bob's next test date: 12/10/07
On a small job, a day or two's work; whether you're working for a fixed price or an hourly rate, no matter how simple the job is, take a minute and write down exactly what's to be done, how much you're to be paid...and when the money is due. Use carbon paper and get it signed. Keep the original.
I even do it with family and friends...I just don't ask them to sign anything.
It only takes one "misunderstanding" to learn this lesson.
I agree that painting even 1 room demands a contract. It's funny(not) I point out globs of old caulk, painted over dirt, and plaster, etc. and the customer says, "I just want a quick, basic paint job". Then, when we're just about done "gee, it really doesn't look as good as I thought".
We spec, prep, # of coats, closets, trim, doors, paint, and upcharge for additional coats (the last minute red accent wall).
Determine expectations and put them in writing and use the phrase "as best possible, not to exceed (i.e.) 3 hours".
YMMV
Jim
The awful thing is that beauty is mysterious as well as terrible. God and the devil are fighting there, and the battlefield is the heart of man.
- Fyodor Dostoyevski