Part of my new year’s resolution is to get my contract tightened way up (from the current slovenly one-page proposal thingy, which has actually always worked fine). I need to get some notes together and go visit the lawyer for an hour or two and see what I can come up with. I’m sure a lot of you have gone through this extensively and have well-developed contracts. What are the most important things to spell out? How are you protecting yourself? Limiting your risk? Defining your job? Assigning responsibility to the owner? Got anything unusually smart in there? All replies appreciated.
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David
Instead of making the lawyers rich we used to put in a clause that specified we would go to the BBB and use their arbitration board to settle disputes. Anything under $6K is too expensive for the courts and settlement after your court date can be up to two or three years, if you win
Mac
I didn't know the bbb had such a thing ...
tell more.
JeffBuck Construction Pittsburgh,PA
Artistry in Carpentry
>>Instead of making the lawyers rich we used to put in a clause
Just for the record, litigation attorneys love it when people adopt the view. Great business generator.
Alternative dispute resolution is a great idea, but even there you need a good contract.
_______________________
Tool Donations Sought
I'm matching tool donors to a church mission to Haiti - we're shipping a bus converted to a medical facility in (now it looks like) April and can fill it with clothes, tools and all sorts of stuff needed in that poorest of all countries. A few hand tools or power tools can provide a livelihood for an otherwise destitute family. Please email me if you have tools to donate.
Thanks to Jeff and David and Jim and Rich and Steven and Mark and Jason and Shep and Jen and Mike and Joe for their offers!
The first donation just arrived! Thanks and God bless!
"You can safely assume that you've created God in your own image, when it turns out that God hates all the same people you do." Anne Lamott
Just for the record, litigation attorneys love it when people adopt the view. Great business generator.
Same as those $49.95 DIY Will Kits, lawyers love them, keep them busier than just drawing up wills, and charge more too.
"Alternative dispute resolution is a great idea, but even there you need a good contract."
Bob.
My dad is a retired attorney. Graduated in the near top of his class at Harvard (Law School). U.S. Supreme Court Justice Kennedy was a classmate of his. He worked on Wall Street his entire life, and made good, very good, money.
He drew up the proposal for my first Real Estate purchase many years back.......20 pages long. Needless to say, I didn't get a counter offer. What I learned from that was that you need to be very "selective" when it comes to what "terms and conditions" you include in a contract.
Every condition adds a $ value to the purchase price.
BTW, I learn quick. My second attempt got me a property for 35% under assessed value.
Jon
Good points - you don't want a wall street lawyer drawing a construction contract up - nor do you want a construction lawyer (yes, they exist) drawing up, say, a derivitives contract.
But if you completely eschew legal advice and bank on alternative dispute resolution you are in big trouble if a deal goes bad.
BTW, if he could only come up with 20 pages you got what you paid for; a good wall street lawyer is just hitting his stride at page 50 or so {G}
_______________________
Tool Donations Sought
I'm matching tool donors to a church mission to Haiti - we're shipping a bus converted to a medical facility in (now it looks like) April and can fill it with clothes, tools and all sorts of stuff needed in that poorest of all countries. A few hand tools or power tools can provide a livelihood for an otherwise destitute family. Please email me if you have tools to donate.
Thanks to Jeff and David and Jim and Rich and Steven and Mark and Jason and Shep and Jen and Mike and Joe for their offers!
The first donation just arrived! Thanks and God bless!
"You can safely assume that you've created God in your own image, when it turns out that God hates all the same people you do." Anne Lamott
i know exactly what you mean- years ago as a fledgling inventor i asked the lawyer brother of a friend to draw up a basic non-disclosure agreement so i could deal with machine shops, etc to have prototypes built. well, let's just say the first shop i went to was not too keen on signing a 7 page beast that virtually limited their ability to do business with anybody without my say so. the second draft- about 3 paragraphs- was far more palatable. you know the old saying about getting paid by the word.
m
"i know exactly what you mean- years ago as a fledgling inventor"
Mitch, just curious, Did your product ever go anywhere?
Jon
the one i started out on that i originally had the monster non-disclosure for, no. but i'm in the process of selling attempt no.2- after ten+ yrs running a successful business based on it- for a decent sum. thanks for asking.
m
"thanks for asking."
Mitch,
Just an FWI,
Building (new product) prototypes is the line of work I'm in. I'm planning on posting some pics tomorrow in the photo gallery of one of the latest we just completed. The main magnetic support frame assembly the NSX CTH nuclear fusion reactor currently being constructed at Auburn University. News crews, as well as the University people are supposed to all be there tomorrow. BIG DAY.
Jon
View Image
looks like a UFO to me..
i know a couple guys who used to work in the engineering/machine shop for the Joint Institute for Laboratory Astrophysics (JILA) at CU-Boulder. they were always doing something wild like that. machines to measure the force of gravity to some ridiculous degree of accuracy or a chamber to push three atoms of something down to absolute zero.
m
"But if you completely eschew legal advice and bank on alternative dispute resolution you are in big trouble if a deal goes bad."..."BTW, if he could only come up with 20 pages you got what you paid for; a good wall street lawyer is just hitting his stride at page 50 or so"
Bob,
Actually, from what I've heard (and seen), my dad was really good at putting in causes that were intentionally vague, and wouldn' draw the attention of most, but could be argued successfully to cover stuff that wasn't explicitly stated in a contract. BTW, his specialty was corporate and real estate law. Donald Trump and Merill Lynch were some of his more well known clients.
Jon
what does btw stand for?
by the way
Here's the dispute resolution clause from my contract - mostly cribbed from an AGC contract. I think the psychological value of an arbitration clause is highly worthwhile... I think people are less inclined to want to get crazy if they realize that there is not going to be a pot of gold at the end. I added the parts about payment time and work stoppage - theoretically I can't get more than two weeks behind if I'm not paid. More importantly, you can't just walk off the job... that can be reciprocal breach of contract.
ARTICLE SIX
DISPUTE RESOLUTION
INITIAL DISPUTE RESOLUTION: If a dispute arises out of or relates to this Agreement or its breach, the parties shall endeavor to settle the dispute first through direct discussions. If the dispute cannot be resolved through direct discussions, the parties shall participate in mediation under the Construction Industry Mediation Rules of the American Arbitration Association before recourse to any other form of binding dispute resolution. The location of the mediation shall be the location of the PROJECT. Once a party files a request for mediation with the other party and with the American Arbitration Association, the parties agree to commence such mediation within thirty (30) days of the filing of such request. Either party may terminate the mediation at any time after the first session, but the decision to terminate must be delivered in person and in writing to the other party and the mediator. Engaging in mediation is a condition precedent to any other form of binding dispute resolution.
WORK CONTINUATION AND PAYMENT: Unless otherwise notified by OWNER in writing, the CONTRACTOR shall continue work on the PROJECT during any dispute resolution proceedings. If the CONTRACTOR continues to perform, the OWNER shall continue to make payments in accordance with this Agreement. If at any time the OWNER fails to make payment within the terms of this Agreement (Net 5 days), the CONTRACTOR may notify the OWNER in writing of intent to cease work. Seven days after the OWNER’s receipt of this written notice, the CONTRACTOR will cease work on the PROJECT.
NO LIMITATION OF RIGHTS OR REMEDIES: Nothing in this Agreement shall limit any rights or remedies not expressly waived by the CONTRACTOR which the CONTRACTOR may have under lien laws or payment bonds. Nothing in this Agreement shall limit any rights or remedies not expressly waived by the OWNER which the OWNER may have under lien laws or payment bonds.
COST OF DISPUTE RESOLUTION: The cost of any mediation proceeding shall be shared equally by the parties participating. The prevailing party in any dispute arising out of or relating to this Agreement or its breach, that is resolved by a dispute resolution procedure designated in the CONTRACT, shall be entitled to recover from the other party reasonable attorney’s fees, costs and expenses incurred by the prevailing party in connection with such dispute resolution process. Additionally, the prevailing party shall be entitled to recover costs associated with the collection of such a judgement.
Nick
The key area here is pre-acceptance, by both parties, of arbitration rather than legal dispute resolution prior to starting the project.
Our lawyer told us (1982) if the amount involved was less than $6k to forget it. $3k plus legal fees, 2-3 years court wrangling and no guarantee of payment at the even if you win. What a prospect!
Cheers
Mac
pets and kids out of the way. Not your job to babysit. Penalty for non compliance. It's never been an issue, I suspect largely because I devote a couple of paragraphs to it. Most folks get a nervous look when the dog gets close to the gate blocking it from the area. I like that.
All of your stuff out of my way in the work area. If you insist on leaving the pool table there, yes, in reality I'll deal with it, yes, I'll try to work around it, I'll probably tarp and plastic the thing, but no promises. Anything you leave, don't hold me accountable if you get drywall mud or nicks on it. Effort is to make the area as evacuated as reasonable. Sometimes people have no where to put really big stuff (pool tables, for instance).
"The child is grown / The dream is gone / And I have become / Comfortably numb " lyrics by Roger Waters
ANY change in the above described scope of work WILL add to the cost and will not be performed without a signed change order.
Excellence is its own reward!
we are currently working on a clause for mold and mildew, I would love advice on that
like the idea that BBB and arbitrator, would like to know more
along with nusience pets idea Ours says (not exact workds here)
any delays or expences caused by nuicence pets or person will be billed to owner...............we have added persons,
this came about from a job tha had a senile man that the family was taking care of. He would come out and yell at us for almost any reason, tell us to leave etc. it was sad and it would eat up time
delays or expences can be big
on one job a onwer told us that their dog as a nice dog and not to worry about it, one of my guys, a nice guy , reached down t pet the dog and the dog bit his hamer hand. he couldnt hold a hammer for the rest of the week, the guy couldnt work, we tried to talk to the owner about it, paying for the lost time, of course nothing happened, so now it is in a clause.
I had to order material, only place that had it. On their contract.
driver will not unload truck
driver will not help unload truck
truck will be unloading within 2 hr or $100 per hour after
any load store on yard $50 a day
any load cancelled within 24 of delievery pay full price
Yard will not notified customer of deleivery time and date
The best employee you can have but you wouldn't want him as a neighbor " He the shifty type"
My all time favorite clause spells out how much money will be paid, and when.
Next favorite is clearly stating the length of warrenty period. Do you know that if you don't specify, you're on the hook for 12, count 'em 12, years (at least here in Washington)? I'm not one of those 1 year guys, but 12 years is a long time to stand behind all your subs...especially if you didn't know you had to.
I agree with RW that the "civilians and pets out of warzone" clause is critical, as well as the "we will make every effort to complete work by _______ , but customer understands some delays are out of our control and there is no set in stone completion date" clause.
I really like that arbitration clause someone else mentioned.
Don't limit yourself to mold and mildew.
Leave open for change orders and extra cost for "unknowable and unseen conditions such as...."
.
Excellence is its own reward!
Thanks for the input. Any other ideas? Any books? Anyone heard of this one?
http://www.amazon.com/exec/obidos/tg/detail/-/1572181060/qid=1074036392/sr=1-1/ref=sr_1_1/002-2509720-7073612?v=glance&s=books
Thanks,
DM