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#158919 - 09/22/06 06:50 AM Contract clauses that work
Almost Fried Offline
Member

Registered: 09/04/06
Posts: 104
Loc: Madison County, Ark. USA
Just curious to know of any General Terms and Conditions that you all use in your agreements that have been very helpful. Here is my favorite:
"Once material orders have been acknowledged by trade sources, the cancellation of any or all parts of the work to be undertaken under this Agreement does not cancel the obligation of the Owner to pay the full price of this Agreement."
This has saved me much anguish several times, the forgetting to include it has caused bad times on the domestic front...

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Business, Office, Estimating, Legal:
#158920 - 09/22/06 09:29 AM Re: Contract clauses that work
scameron81 Offline
Member

Registered: 02/24/04
Posts: 80
Loc: Healdsburg, ca, USA
This has been one of the most helpful clause in our contracts given todays crazy markets. The generals have been pretty understanding and receptive as long as we have documentation of the price increase.

1.2
In the event of significant delay or price increase of material occurring during the performance of the contract through no fault of the contractor, the contract sum, time of performance, or contract requirements shall be equitably adjusted by change order in accordance with the procedures of the contract documents. A change in price of an item of material shall be considered significant when the price of an item increases 5% between the date of this contract and the date of installation.

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#158921 - 09/22/06 10:04 AM Re: Contract clauses that work
TNSunny Offline
Member

Registered: 12/06/05
Posts: 44
Loc: Tennessee
Two come to mind:

1) ENTIRE AND BINDING AGREEMENT: This Agreement contains the entire agreement of the parties hereto, and may not be modified other than by their express, written, mutual consent. Any representations, statements, or other communications not written herein shall not be relied upon by either party.

2) PAYMENT: You agree to make payment in full at the time services are rendered, unless other arrangements are made in advance, in writing, and signed by both parties. Payment shall be made by check or cash. If a check is not honored by the bank for any reason, You agree to pay a $40.00 returned check fee per occurrence in addition to the Total price listed herein. If payment is not received by (Company Name) within the time stated above, You agree to pay interest of 1.5% per month or the maximum legal rate on the unpaid balance until the account is paid in full. In the event this Agreement or account is turned over to an attorney or others for collection or enforcement, You agree to pay all costs, expenses, collection costs, court costs and attorney fees incurred by (Company Name), including the costs of any appeals. Failure to make payment in full as agreed may result in a lien being filed against Your property.
_________________________
Kevin

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#158922 - 09/22/06 03:48 PM Re: Contract clauses that work
Tom H Offline
Member

Registered: 01/31/05
Posts: 74
Loc: Milford, Ct, USA
I'm paraphrasing here cause it's friday night and the office PC is off but here goes;

1. "Finished areas to be protected with drop cloths only in areas being worked on. Upon completion of project, jobsite area to be left in a broom swept condition. Dust containment and removal by others."

2. "Any damage done to finished wall, doors, ceiling, trim and any other finished areas/materials during the course of construction is not the responsibility of contractor to repair or replace"

Both have helped many times, especially when you begin cutting in an old work box in a horse hair plaster wall. Or cut open a ceiling to add recess that the lighting designer suppiled new work cans for.

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#158923 - 09/22/06 08:00 PM Re: Contract clauses that work
Sixer Offline
Member

Registered: 08/08/05
Posts: 264
Loc: Canada
Here's what I feel are the most important ones on my contract:

16. It is the Customer’s responsibility to ensure that the work area is safe and free of any hazardous material and/or conditions for the Contractor and its employees. Any known hazardous conditions shall be communicated to the Contractor prior to commencement of work. The Contractor shall have the right to refuse to work in unsafe, unsanitary, or cluttered conditions. It is the Customer's responsibility to move any materials away from the Contractor’s working area(s).

17. The Customer shall provide sanitary toilet facilities for the use of the Contractor and its employees for the duration of the Agreement.

22. Once the materials have been installed they become an integral part of the premises, therefore the Customer shall be responsible for any cases of damage or theft that occur to installed materials. The Customer agrees to carry adequate construction insurance for the duration of the Agreement.

24. The Contractor shall not be responsible for providing extension cords, temporary lighting or wiring for temporary heating as part of this Agreement.

33. The Contractor shall have the right to terminate this Agreement if construction delays in excess of six months from the date this Agreement was signed, prevent the Contractor from completing the work and closing the electrical permit. In this case, the Customer shall pay the Contractor a pro-rated amount to cover the materials and labour completed to date.

The last one is for those projects that last for years because they have either ran out of money or are having trouble selling the property.
_________________________
Sixer

"Will it be cheaper if I drill the holes for you?"

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#158924 - 09/26/06 07:41 AM Re: Contract clauses that work
Almost Fried Offline
Member

Registered: 09/04/06
Posts: 104
Loc: Madison County, Ark. USA
Thanks for the input, yall. Does this mean that of all the posters on ECN, only 4 use contracts??? I thought that many, many members here were Electrical CONTRACTors...it only took me 20 years and $ 30K in losses to realize the subtlety there.

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#158925 - 09/26/06 08:57 AM Re: Contract clauses that work
Tiger Offline
Member

Registered: 05/04/05
Posts: 714
Loc: Crystal Lake, IL USA
I use contracts, and try to be helpful in areas where I have experience...like residential service. Giving legal advice to you would be useless.

Dave

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#158926 - 09/26/06 07:19 PM Re: Contract clauses that work
renosteinke Offline
Cat Servant
Member

Registered: 01/22/05
Posts: 5305
Loc: Blue Collar Country
Almost, I know my limitations. Writing contracts is outside my expertise.

That said, most contract issues are pretty well defined already, either by the Uniform Commercial Code, or by prooven 'boilerplate' contracting forms. This is where trade associations can be of great help to their members.

Writing your own contracts has it's own issues. Maybe you have a real need to address something; or, maybe, you're just opening a Pandora's box of trouble.

In my experience, you'll never, ever come out ahead dealing with a scoundrel- no matter how clever you word the paperwork. For me, it's not about knowing the law, or knowing the system.... but, rather, knowing the other party.

I'm not an electrician because I like to argue. There are lots of places I'd rather be, than at the courthouse. I'm there to make things work, and I need to be paid to make that happen.

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#158927 - 09/27/06 04:22 AM Re: Contract clauses that work
Almost Fried Offline
Member

Registered: 09/04/06
Posts: 104
Loc: Madison County, Ark. USA
Reno, great points!

I am not trying to write my own contracts, I am having my old one re-written to clean up a few grey areas.

If the customer is a scoundrel, and if you have a great contract, even with a judgment against the party, you still can't force him to pay you. Those kind of people have devious ways to hide assets, or just hide.

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#158928 - 09/27/06 08:17 AM Re: Contract clauses that work
TNSunny Offline
Member

Registered: 12/06/05
Posts: 44
Loc: Tennessee
I have a degree in legal studies, work as a property manager for a lawyer, and have dealt with many other lawyers and lawsuits (in addition to being an electrical contractor). The one thing that I have learned from all of this is that NO lawyer is an expert in all areas of law. The law is just too broad of a field to be knowledgeable in all of it. SO, you definitely need to educate yourself on contract clauses that you would like to have in your contract and submit them to your attorney in writing.

Let me give you an example to illustrate my point. I have been through numerous training courses in commercial real estate and leasing. I have assisted in the drafting of many leases and other documents. (Not bragging, just need to show that I know my stuff.) One of my tenant clients asked for me to submit a copy of the landlord's lease to their attorney for review - so I did. I had already reviewed the lease and realized that several clauses needed to be added to protect my client. But the lawyer came back several days later and said, "it looks like standard lease language to me. I told them it would be ok to sign." If I hadn't have known about these other clauses myself, they would have never been added to the lease to protect the client. This guy might have been a great lawyer...but he certainly wasn't a great commercial real estate lawyer.

Conclusion: Educate yourself! A large percentage of cases WILL pay if you win judgment against them. Better to have a good contract and increase your chances of collecting your money. In fact, having a really solid contract will increase your chances of winning outside of court. Research your attorney! Make sure they have lots of training and experience in contract law. It also helps if they have represented electricians or other trades in the past. And don't be afraid to question them or make suggestions - they often overlook the simplest things. In fact, 99% of all lawyers simply use boilerplate language and simple pre-printed checklists when drafting contracts. Make them earn their money by ensuring that the contract is tailored to YOUR needs.

Hope this helps.

Kevin
_________________________
Kevin

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