I'm new to contracting. As has been said before we spend years working in the field but then we get out into the business world of contracting it's usually the school of hard knocks. I recently had a customer I started doing work for without any signed contracts done first. When I snapped to what we should have done they suddenly didn't want to work with me. Telling me to get to work that he would have a check for the work we had already done, ect... Bottom line is when I demanded a contract before any more work would happen he balked, paid me for what had been done so far, and we parted ways. I hate leaving a job like that but I couldn't go anyfurther without getting the legalities taken care of. Do you guys ALWAYS get the contract signed before even service work begins? Also, do you think this customer can retaliate in someway?
I've never signed someone else's contract, they've signed mine...I'm a contractor. I won't say I always get a contract. There are people I've worked for many years that I've established a good relationship with & they always write a check when I ask. In general, though with new clients I'm getting an autograph within 5 minutes of meeting them.
Reno still thinks of itself as "The Old West." I am able to do work with many of my 'old time' customers on a handshake. They call, I work, I bill, I get paid. I realize that I am very fortunate in this regard.
Even with these customers (some are government), the time comes when you have to jump through all the hoops. When you are bidding a job, you are actually agreeing to the customers' contract. You are giving your price to agree to their terms. If there are terms you object to, you have the opportunity to raise that objection.
Certain large corporations try playing 'contract' games ... I let that happen -maybe- once.
Often the contract that you're presented is a commonly recognized form, one that has proven itself over time. AIA contracts are a good example of this. Other times, the 'contract' is an extremely biased DIY attempt to screw you.
The DIY contracts - often presented by corporations with larger egos than assets - frequently include clauses (lien waivers, pay-when-paid, etc.) that the courts will not enforce. Some are even illegal. Others (disputes will be settled in court in Kuala Lampur) are enforceable, and place you at a distinct disadvantage.
KISS applies. Keep It Simple, Straightforward. You're not a lawyer, you're an electrician. The contract's primary purposes are to define what needs doing, who does it, and when you will be paid.
It is critical that you know your state's contracting law. These are the 'assumptions' and 'ground rules' that are applied to every job. For example, you may be required to provide a 1 year warranty. If so, you can't claim to do "as is" work. If nothing else, your knowing 'the rules' will help you to recognize when the other guy is playing games.
I am a contractor located in Illinois. Even if we sign a contract with an out of state contractor and their contract states the laws of their home state apply, the laws of Illinois actually apply due to the work being performed is in Illinois.
I have seen some downright comical paragraphs in contracts (you, the sub, agree to waive all lien rights, work not shown on the drawings deemed necessary shall be performed at no additional cost, your change orders are limited to your actual costs plus 5%, etc.)
A smile and a handshake would be a nice way to do business. I have a couple of customers I can trust. Everyone else I hand a pen to sign the contract.
And make sure your contract includes your scope of work. Watch out for modifications made by the customers to your scope. Ambiguities can bite you hard.
You'll get burned eventually. We just learn from our mistakes and grow stronger.
The saga continues... The customer contacted me yesterday and left a voicemail (I was busy on another customers job working in an attic). The customer is complaining that I took off with some of his wire, which I ofcourse did not. I only left with a partial roll of 14/2wg that I bought and didn't even ask him to reimburse to me. On the other hand he still has my Greenlee 1/2" slugbuster and a 100' extension cord. He also threatened to file a complaint with the state.
I contacted the state and they say they take cusumer complaints seriously but the investigator will ask the consumer many questions before they get to me. They say that they are trying to protect consumers from contractors using predatory business practices.
I'm an honorably dicharged vet, have probably a dozen or so happy customers, some are repeat, and can't stand for my ethics to be questioned and obviously don't want to loose my business to one frivilous and ficticious complaint.
Anything else you guys can offer is much appreciated. Matt
HIS wire? Does he owe you anything? Unless you gave him the receipt for reimbursement, or you billed him by the roll, any wire not installed is still yours. If nothing else, having a contractors' license should make it clear that you were not some 'temp' he hired 'down by the river.'
As for him withholding your tools ... there's a word for that: theft. File a report. If nothing else, make him sign a statement with the police asserting "I have no idea where those are." If he's playing games .... sooner or later, that statement will come back to haunt him.
The "consumer" folks are not complete idiots. They're well aware that there are customers - as well as CUSStomers. Don't let this bully play games.
Looking at it from another perspective .... $250 worth of tools is a cheap price to be rid of this loser. There is absolutely no way I'd ever deal with him again.
Matt A few suggestions I've learned. NEVER do T&M or "not to exceed" Unless the job is only going to be about half a day or less. BECAUSE, customers WILL get picky about your phone use, coffee, how long it takes compared to what his friends said it should, layout and design time, shopping for parts, the list is endless. The bigger the job the worse it is, and your guarenteed NO PROFIT.
If they are afraid to give a materials payment up front, offer to accept it on the day you begin work.
Get a permit, if you don't get a permit (if required) you will have no legal standing to get paid.
If they don't want a permit or contract It's so they have power over you. This forces you to please them completly or risk not getting paid. Even if they pay you, it'll be for less then it should be.
Also concerning your first post. "Telling me to get to work that he would have a check for the work we had already done, " I think he was setting you up! It goes like this...you do some work, get a check but not in full. Then he keeps stringing you along. As long as he owes you you'll come running and do what ever he wants! When you're all done, the last check will never come. He will figure that you have been paid enough and make up excuses like "you took some of his wire"!!
Thanks guys! This has been an interesting learning experience. The saga finally ended friday. I called the guy back and he had a completely different demeanor. Apologized for the message he left, seemed to accept my word that I didn't have anything of his. Then asked if I would return to the job; he would sign whatever contract I had. I told him I would think about it and call him back. Close to an hour later I got a text message from him saying he was going to go another direction. I had no plans on returning but did want to consider the situation carefully before calling him back.
I see that you guys are right on the money about situations like this. Thank God I got out of this one with what we had earned, it could have easily gone the other way.