Contract verbiage help

[evo]

I’ve had it with free quotes and clients backing out at the last moment.

I use jobber and love it for the most part, and I’ve been funneling all incoming work to my website where they can fill out a work request.

The numbers are not firm, but I will be moving to non refundable/non deductible (off invoice) estimate fees. I rather not take deposits on approved estimates, but would rather add into my contract with a loud and full disclaimer that if the quote is approved and then canceled, rescheduled more than once or the like the job will be canceled until an administration fee is paid.

I know deposits would be easier in some regards but harder for me to track. Unless anyone here has developed a deposit system @oceans (hint hint)….

I just want to work and make money, not deal with everyone’s BS.

 

[Reach]

I will try to see what I can write up for something; I will not promise that it will be as good as a lawyer can write, but my writing seems to be pretty solid this far

Jobber is excellent at handling deposits. Include it as a requirement in the quote and Jobber will require it to be paid if the customer signs online. Jobber also tracks deposits very well and automatically applies them to invoices, we have been very happy with how well it works.

 

[Tom Dunlap]

Gather info here but be sure to have the final draft reviewed by an experienced business attorney.

We rant about unskilled 'lawyers' doing their own treework after all.

 

[evo]

Gather info here but be sure to have the final draft reviewed by an experienced business attorney.

We rant about unskilled 'lawyers' doing their own treework after all.

Yes, I certainly will. Mostly looking for rough draft type ideas (and a framework).

I've simply have had it with clients who sign the contract only to cancel within a week (presumably got a better price), or when I call them to let them know they are coming up in the next few weeks they cancel all together. We have some very special people here on the island...

Maybe I'm just hung up on the word deposit. I think of it as a non refundable service fee/retainer for admin.

One project has so far required 4 site visits, one permit application, one report, two contracts, 10 emails, tree phone calls, and then 10 emails from the city... City "will issue a decision next week" 10 days ago.. Now the complainers (neighbors) who want the trees removed are pressuring me to do it before birdy nesting season or delay the project. After x amount of effort I need to be comped..

 

[Reach]

A thought of some verbiage to add to your contract, and a disclaimer.

Nothing I say here has any legal authority, and I am not a lawyer. You should consult a lawyer for legal advice, and check with your state contractor laws to ensure that this verbiage is legal.

“Once signed by guarantor, this is a legally binding contract and can only be cancelled if written cancellation request is received thirty (30) days before scheduled completion date. Cancellation will result in forfeiture of any and all required deposit payments. Rescheduling of project with less than seven (7) days notice will result in a rescheduling fee of $200.”

Let me know if you want anything added, and feel free to edit as you see fit. Also, if you want to see the full verbiage we add to our contracts, send me a PM and I’ll share it with you privately.

 

[oceans]

A thought of some verbiage to add to your contract, and a disclaimer.

Nothing I say here has any legal authority, and I am not a lawyer. You should consult a lawyer for legal advice, and check with your state contractor laws to ensure that this verbiage is legal.

“Once signed by guarantor, this is a legally binding contract and can only be cancelled if written cancellation request is received thirty (30) days before scheduled completion date. Cancellation will result in forfeiture of any and all required deposit payments. Rescheduling of project with less than seven (7) days notice will result in a rescheduling fee of $200.”

Let me know if you want anything added, and feel free to edit as you see fit. Also, if you want to see the full verbiage we add to our contracts, send me a PM and I’ll share it with you privately.

You may want to add that a degree of rescheduling can be done on your behalf without voiding the contract.

 

[oceans]

Yes, I certainly will. Mostly looking for rough draft type ideas (and a framework).

I've simply have had it with clients who sign the contract only to cancel within a week (presumably got a better price), or when I call them to let them know they are coming up in the next few weeks they cancel all together. We have some very special people here on the island...

Maybe I'm just hung up on the word deposit. I think of it as a non refundable service fee/retainer for admin.

One project has so far required 4 site visits, one permit application, one report, two contracts, 10 emails, tree phone calls, and then 10 emails from the city... City "will issue a decision next week" 10 days ago.. Now the complainers (neighbors) who want the trees removed are pressuring me to do it before birdy nesting season or delay the project. After x amount of effort I need to be comped..

I think you can write something up that simply allows you to charge for your time to “estimate” for any efforts beyond 1 hour.

A simple job might take a short drive, a quick look, a chat, and a minute on the software. If you’re allowed to bill for larger scale job estimates, and the client knows it up front, everyone is on board. Maybe?

I think some folks assume nothing about the number of hats a small business owner operator has to wear. They may think nothing of leading you around if they assume that’s your only role with the company. They may even try giving you business advice such as “you should hire people to do all the hard stuff for you, just so I can humbly brag about my life and indecisively point out what I need you to do for me.”

 

[dspacio]

This is potent today. I have a small cabinetry job, was scheduled for the first week of January. Has gone from a go, to a wait, to a go, to a stop, to a go....
Halted on Monday as I came by to get a final measurement he called it off waiting for other material ( I am selling some oak I milled, to build the thing) ; now last night wants it again within a week ?!?!

I am going to add an expiration date to estimates now.
Bid for 5 hours of work, have likely passed two hours just texting with the guy over the past 8 weeks. I priced it as something I could fit in on bad weather days, now it's become a whole different job.

 

[Dan Cobb]

This is potent today. I have a small cabinetry job, was scheduled for the first week of January. Has gone from a go, to a wait, to a go, to a stop, to a go....
Halted on Monday as I came by to get a final measurement he called it off waiting for other material ( I am selling some oak I milled, to build the thing) ; now last night wants it again within a week ?!?!

I am going to add an expiration date to estimates now.
Bid for 5 hours of work, have likely passed two hours just texting with the guy over the past 8 weeks. I priced it as something I could fit in on bad weather days, now it's become a whole different job.

This client sounds like one to avoid. If getting started is such a headache, making him satisfied and getting fully paid may be worse. He sounds like the type who will want something else after you build what he asked for. If not contractually committed to the job, I wouldn't do it. Cut my losses.

Have your schedule booked for weeks or some benign way of having him get someone else to do the work. I do a variety of other work besides trees and have encountered a couple of people whose business just isn't worth having to deal with them.

 

[Reach]

This is potent today. I have a small cabinetry job, was scheduled for the first week of January. Has gone from a go, to a wait, to a go, to a stop, to a go....
Halted on Monday as I came by to get a final measurement he called it off waiting for other material ( I am selling some oak I milled, to build the thing) ; now last night wants it again within a week ?!?!

I am going to add an expiration date to estimates now.
Bid for 5 hours of work, have likely passed two hours just texting with the guy over the past 8 weeks. I priced it as something I could fit in on bad weather days, now it's become a whole different job.

Customers like that are very much a royal pain. One of the reasons we require a deposit is to cut down on that. It still happens sometimes, but it happens less, since the customer has some cash already invested so they’re more likely to move forward and complete the project. Those who won’t make that commitment can go elsewhere, and make a nuisance of themselves to some other company. My time is too valuable to put up with that foolishness.

 

[evo]

Customers like that are very much a royal pain. One of the reasons we require a deposit is to cut down on that. It still happens sometimes, but it happens less, since the customer has some cash already invested so they’re more likely to move forward and complete the project. Those who won’t make that commitment can go elsewhere, and make a nuisance of themselves to some other company. My time is too valuable to put up with that foolishness.

How often on jobs that you collect a deposit on does the client back out or change the contract? Do you ever refund the deposit back to them in these cases? That is my biggest hesitation, the added layers of tracking a whole different class of funds and cash flow

 

[Reach]

How often on jobs that you collect a deposit on does the client back out or change the contract? Do you ever refund the deposit back to them in these cases? That is my biggest hesitation, the added layers of tracking a whole different class of funds and cash flow

It is rare that a project, once deposit is received, is cancelled. If they do, we refund the deposit. Jobber tracks those and so does QuickBooks, so it’s not hard to refund, we know how much we received and when since it shows in both Jobber and in QuickBooks.

Give deposits a try on a few quotes with Jobber, you may find that it is easier than you think. When a customer has paid a deposit, Jobber will show that customer as having a negative account balance of that amount, and it will show you when that deposit came in.

I could probably do a Zoom screen share with you to show you what it looks like, or the Jobber customer care team may have a way for you to see it or to show it to you through a “dummy” account they have for that purpose. Might be worth reaching out to them to ask.

 

[Dan Cobb]

What's the point of a deposit if it's refundable? Just seems like it makes for more administrative work. The only times I've gotten deposits is for doing work (not related to trees) that required significant material purchases on the front end.

 

[dspacio]

This client sounds like one to avoid.... If not contractually committed to the job, I wouldn't do it. Cut my losses.

Yea I am very considering it. I told him I would check back in May.
He is a friend of a friend and I did a bit of work there already that he liked; but gave me a time working down the price (that I already rounded down)..
I don't enjoy finish carpentry enough to fight for it right now, I have done plenty!

The experience did convince me that paid estimates are a real thing. I have a few hours in, making estimates for 3 projects there, all this communication, and all it's done is burn time.
A deposit down would definitely give him incentive to answer my questions that could have made the project happen successfully for us both.

Business rarely fails to keep me on my toes. Like @evo said, I wish I could just do the work rather than this kinda hassle, but going on 7 years independent contracting it would take a strong offer for me to give it up. Though I have been tempted lately. Feels like every week I need to prove the specific value of every working day, and it drives me batty. But these qualities are baked in and it keeps me real.

 

[evo]

What's the point of a deposit if it's refundable? Just seems like it makes for more administrative work. The only times I've gotten deposits is for doing work (not related to trees) that required significant material purchases on the front end.

These are my thoughts, and why I'm leaning towards 'admin fee'. Which I would imagine would make clients wary. It's all rolled into the daily overhead nut already, but this would be simply prepaid and non refundable (unless I have some sort of gross error).. Say the job is $2K for one day work. I'd just do two line times, one for $1900 for the tree work, and one for $100 for admin fees, then require a the $100 is prepaid.
@Reach
I've played with it a few times, but only when I am buying actual materials or trees to be planted. So I've seen what it looks like. I think we have chatted about this in the past, but do you segregate the deposit funds into a separate bank account and transfer once the job has closed? or do the bean counters just track it all in quickbooks?

 

[cerviarborist]

Before you put verbiage in your contract to the effect that "A certain number of cancellations or reschedules will result in the requirement of payment of an administrative fee before re-engaging", consider that it may be just another way of allowing a prospect to drop you, without saying so. You could alternatively state that estimates are only valid providing that work is performed within 30 days of receipt of the estimate, and that beyond that time, another consultation call and fee may be necessary to take site/weather/tree condition changes into consideration for current pricing. Try to give prospects a reason to proceed, rather than a reason to fade away.

I feel very strongly that unless the prospect can provide tight and clear specifications (tight enough that I can look at the property in Google Maps, see the tree they're talking about, and use online measuring widgets to determine the distances debris must be forwarded, access etc, an onsite paid consultation is indicated. That's what I do anyway. I don't leave my house and look at trees and give opinions regarding mitigation without collecting a fee....period. Further I don't discount the price of the work by the amount of the fee. That just strikes me as a shell game, demeaning to both myself and the client. Time is money, and unless the client can figure out how to replace the time, fuel and equipment wear that it took to get to their site and inspect it and the tree. .....pay the man.

 

[evo]

Before you put verbiage in your contract to the effect that "A certain number of cancellations or reschedules will result in the requirement of payment of an administrative fee before re-engaging", consider that it may be just another way of allowing a prospect to drop you, without saying so. You could alternatively state that estimates are only valid providing that work is performed within 30 days of receipt of the estimate, and that beyond that time, another consultation call and fee may be necessary to take site/weather/tree condition changes into consideration for current pricing. Try to give prospects a reason to proceed, rather than a reason to fade away.

I feel very strongly that unless the prospect can provide tight and clear specifications (tight enough that I can look at the property in Google Maps, see the tree they're talking about, and use online measuring widgets to determine the distances debris must be forwarded, access etc, an onsite paid consultation is indicated. That's what I do anyway. I don't leave my house and look at trees and give opinions regarding mitigation without collecting a fee....period. Further I don't discount the price of the work by the amount of the fee. That just strikes me as a shell game, demeaning to both myself and the client. Time is money, and unless the client can figure out how to replace the time, fuel and equipment wear that it took to get to their site and inspect it and the tree. .....pay the man.

I hear you, but I’m booking into June!

 

[Reach]

These are my thoughts, and why I'm leaning towards 'admin fee'. Which I would imagine would make clients wary. It's all rolled into the daily overhead nut already, but this would be simply prepaid and non refundable (unless I have some sort of gross error).. Say the job is $2K for one day work. I'd just do two line times, one for $1900 for the tree work, and one for $100 for admin fees, then require a the $100 is prepaid.
@Reach
I've played with it a few times, but only when I am buying actual materials or trees to be planted. So I've seen what it looks like. I think we have chatted about this in the past, but do you segregate the deposit funds into a separate bank account and transfer once the job has closed? or do the bean counters just track it all in quickbooks?

We used to segregate deposits from the general fund, but found that it just turns into a whole pile of unnecessary bank transfers that just wasted a lot of our time. We just track the theoretical “account” in QuickBooks, it works well for us that way.

 

[Reach]

What's the point of a deposit if it's refundable? Just seems like it makes for more administrative work. The only times I've gotten deposits is for doing work (not related to trees) that required significant material purchases on the front end.

The point is that we do not advertise that it’s refundable. If nothing else, the deterrent that the customer has to reach out and ask for a refund helps stop them from cancelling. Also, it seems that it drives off some of those who don’t actually commit fully and keep searching for lower prices. And finally, it gives us something from the customers who decide they just don’t want to pay their bill once the job is done.