I am working on creating a new Work Order/Invoice that I will require customers to sign prior to commencing service work. The intent is to have a contract in place that will at least increase my chances of being paid when the work is complete. Would any of you mind posting the legal verbage that you have in your contracts? I have a degree in legal studies, but even attorneys often run across good clauses to add to their standard contracts from time to time. I just want to make sure I haven't missed anything.
On a related note, do any of you charge late fees? If so, how much? A percentage or a set fee?
Seems to me that one possible sticking point to avoid is to make sure you have a way for all parties involved to agree as to when the work is complete. Many times failure to pay is caused by one party alleging something is not satisfactorily completed by the other party (at least to their expectation).
I've seen a 1% per month provision for late payments in a lot of agreements / contracts, but you may have to resort to filing a claim (civil suite) in order to obtain a judgement on this. It sounds good but I think it's rarely enforced.
There are 10 types of people. Those who know binary, and those who don't.
In the event that the Customer shall sell, or otherwise dispose of the land and premises, or commit an act of bankruptcy, or allow a judgment or lien to be registered against the land and premises, the whole of the unpaid balance shall immediately become due and payable to the Contractor.
Payment schedules will be according to the reverse side of this Agreement. The full amount of the invoice balance is due and payable upon delivery of the invoice. An interest charge of 2% monthly (26.8% annually) will apply to all accounts not paid within 30 days of the date of the invoice. A $25.00 service charge will apply to each payment that is dishonored by the bank for any reason. Postmarks are not acceptable as proof of payment date.
If the Customer breaches this Agreement before the Contractor has commenced the installation, application or ordering of the materials, the Customer agrees to pay the Contractor as liquidated damages a sum equal to 10% of the total contract price.
It is understood and agreed by both parties that payment in full of this Agreement signifies satisfactory completion of this contract.
The Customer in possession of the goods, and not in default of this Agreement, shall have clear title to the goods.
"Will it be cheaper if I drill the holes for you?"
Thank you for your replies so far. My business is primarily comprised of residential flat-rate service work - but I also do a small amount of light commercial service work. Consequently, my forms have to be adaptable to both, with a bit more emphasis on the residential service (contracting forms will be separate). I'm using a NEBS service form as a guide for customizing my own, and I'm trying to get everything on the front of one page to keep the printing costs down. This means I have to keep the legal language as short as possible, while still coverining most of my bases. Not so easy to do for a legal-minded person! Anyway, here is what I have so far.
All material is guaranteed to be as specified. All work to be completed in a workmanlike manner according to standard practices. Any alteration or deviation from above specifications involving extra costs will be executed only upon written orders signed by both parties, and will become an extra charge over and above the price listed above. The price listed above does not include any unforeseen problems or conditions that might be found once the work has commenced. All arrangements contingent upon strikes, accidents, or delays beyond our control. [Contractor's Name] is insured for general liability, automobile liability, and worker’s compensation (as required by law). All labor and materials supplied by [Contractor's Name] are guaranteed for one (1) year from the date of installation. No guarantee on items supplied by any other party, or work not completed by [Contractor's Name] 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 cash or check. 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 amount listed above. If payment is not received by [Contractor's Name] within the time stated above, You agree to pay interest at the maximum legal rate on the unpaid balance until the account is paid in full. In the event this contract or account is turned over to an attorney for enforcement or collection, You agree to pay all costs, expenses, and attorney fees incurred by [Contractor's Name] This contract is to be interpreted by the laws of the State of Tennessee, and both parties agree to a venue of [Name of County], Tennessee. By signing below, You are agreeing to be bound by these terms and are authorizing the work to be performed as specified.
Thank you for your replies. I do have one question as a newbie to this forum, though. I have noticed several posts on various threads, including this one, where people are wanting to share information via e-mail. If it's a private matter, I could understand this. But doesn't it kind of negate the purpose of the forums to only share the information by e-mail? And what good does that do when the person then gets a hundred e-mails asking for this information to be sent to them as well?
Just wondering. It seems to me that if I don't feel comfortable sharing it with the group, then I'm not going to share it at all.
The purpose of having an E-Mail address is to send documents or other information, such as forms, drawings, pictures, that would otherwise take up space on the forum, and may not be of general intrest.
Well, after quite a few hours of legal research and borrowing from several contracts, here is what I have come up with to put on the back of my work order/invoices. Please note, however, that I am not a lawyer and make no warranties or representations as to the legality of any of this information. This is not intended as, nor should be construed as, the rendering of legal advice. You may copy and use it at your own risk.
MATERIALS AND EQUIPMENT: All material is guaranteed to be as specified. All material and equipment will be installed in a manner consistent with standard practices at this time. It is agreed that title to all material required for performance of the work herein is to remain the property of [Contractor] until paid in full. ALTERATIONS OR DEVIATIONS: Any alteration or deviation from above specifications involving extra costs will be executed only upon written orders signed by both parties, and will become an extra charge over and above the price(s) listed on the front of this Agreement. These orders and related charges shall in no way make void this Agreement. NON-COMPETE CLAUSE: You and all of your authorized representatives agree not to contract or employ any of [Contractor's] employees for a period of one (1) year from the completion of any electrical work performed for You by [Contractor], or within a fifty (50) mile radius of [Contractor's] primary place of business. EXCLUSIONS: This Agreement does not include concrete, forming, painting, patching, trenching, core drilling, venting, sealing of roof penetrations, or any other exclusion specifically listed on the front of this Agreement. [Contractor] will not be responsible for fixtures and equipment supplied by others. The price specified on the front of this Agreement does not cover: (1) The warranty of fixtures and equipment supplied by others. (2) The assembly of fixtures and/or equipment supplied by others. (3) Fixtures weighing more than fifty (50) pounds. (4) Fixtures, wiring, wiring devices, etc. required by others (e.g. codes enforcement officials, etc.) (5) Permits, governmental fees, licenses, and inspections unless specifically listed on the front of this Agreement. (6) Any problems or conditions found or encountered by [Contractor] after commencement of the specified work which were not foreseen or anticipated at the time of the execution of this Agreement, and thus were not included in the specified price. The repair of such problems or conditions shall become an extra charge over and above the price(s) specified on the front of this Agreement. INSURANCE: You are responsible for storing and protecting any fixtures or equipment left on Your premises and agree to be liable for their theft, damage, vandalism, etc. You agree to carry fire, tornado, and other necessary insurance to protect the work, fixtures, and equipment. [Contractor] is insured for general liability, automobile liability, and worker’s compensation (as required by law). WARRANTY: Warranties shall apply exclusively to the electrical installation of the material, fixtures, equipment, and other items supplied by [Contractor]. Warranty does not apply to: (1) Material, fixtures, equipment and other items supplied by others. (2) Extensions or additions to the original installation if made by others. All material and equipment shall be as warranted by the manufacturer, and shall commence from the date of installation and continue for a maximum period of one (1) year. Labor for all work specified herein shall be warranted for one (1) year from the date of original service or installation. Warranty or service will not be performed if any payments according to this Agreement become past due, including change orders or additional work authorizations. [CONTRACTOR] SHALL NOT BE LIABLE: For failure to perform if prevented by strikes or other labor disputes, accidents, acts of God, governmental or municipal regulation or interference, shortages of labor or materials, delays in transportation, non-availability of the same from manufacturer or supplier, or other causes beyond [Contractor's] control. No such delay shall be deemed a default on the part of [Contractor], and, in the event of any such delay, the time limit for performance of the work shall be correspondingly extended. In no event shall [Contractor] be liable for special or consequential damages whatsoever or however caused. 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 cash or check. If a check is not honored by the bank for any reason, You agree to pay a $30.00 returned check fee per occurrence in addition to the Total price listed herein. If payment is not received by [Contractor] 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 enforcement or collection, You agree to pay all costs, expenses, collection costs, court costs and attorney fees incurred by [Contractor], including the costs of any appeals. Failure to make payment in full as agreed may result in a lien being filed against Your property. GOVERNING LAW AND VENUE: This Agreement is to be interpreted by the laws of the State of Tennessee, and both parties agree to a venue of [Your County], Tennessee. 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. PROVISIONS SEVERABLE: The invalidity, illegality, or unenforceability of any one provision of this Agreement shall not affect the validity, legality, or enforceability of the other provisions of this Agreement. CANCELLATION: You agree to pay the full price specified on the front of this Agreement if you cancel after the work has commenced. This Agreement is Void if not accepted and received by [Contractor] within thirty (30) days.
"In the event that the Customer shall sell, or otherwise dispose of the land and premises, or commit an act of bankruptcy, or allow a judgment or lien to be registered against the land and premises, the whole of the unpaid balance shall immediately become due and payable to the Contractor."
It doesnt matter that you have this listed in your contract. Specificaly, about bankruptcy. Federal law protects certain bankruptcies. An "apointe" is appointed to collect any monies after a bankruptcy. If you (being a contractor) are paid within 90 days of a filed bankruptcy (depending on the chapter) you are considiered "preferrential" and required to pay it back. It is not wise to take legal advise from any forum. For we (at least myself) are not an attorney. If you can afford to do business yourself, than you can afford legal advise!