Many construction-related disputes can be avoided with a well written contract. All too often, work is done with an inadequate contract or no written contract at all. We’re going to talk about some of the things that need to be included.
Pre-Construction Conference
Your pre-construction conference should be specified and outlined. This is the conference that is held 5 to 7 working days after the contract is signed where you, the owner and all subs meet and work out any details that are not absolutely clear. This should be a mandatory meeting for the owner, contractor and anyone else who will work on that job (like subcontractors).
This pre-construction conference also gives you the chance to clearly define for the owner what personal and household items they will need to move out of the work areas and by when. Your hourly rate to move anything and everything should be specifically outlined in the contract.
Start and Completion Dates
Many contractors don’t want to write a start or completion date in their contract, even though their clients might want it, because they’re afraid they won’t be able to meet those dates. It’s possible to include a date that gives you some “time slippage” in case something happens.
Instead of saying a job will start February 10, state that “the job will start on or about February 10”. Instead of saying the job will be completed by May 16, state, “the job will be completed on or about May 16”. Now you have the ability to start the job anywhere from February 4 or 5 to February 12 or 13, and finish the job with the same + or – factor in days. It’s been my experience that if you keep communicating with the owner and have a reasonable explanation for any problems affecting the start or completion date, most owners will adjust to the new dates with no complaints.
Working Days and Hours
You need to be very clear what you consider to be working days and hours. You might include language that says your normal work days are Monday through Saturday (or whatever days you work) and the hours you work are from 7:00 am to 5:00 pm. Additionally, you need to specifically state the days you don’t work, such as Thanksgiving, Christmas, New Year’s Day, July 4, Memorial Day, etc.
Now take it one step farther, just to C.Y.A. (Cover Your Assets). You also need to specifically state that the owner will have the home/building or property open and available for your crews starting on or before 7:00 am (or whenever) and will keep the home/building open for work until 5:00 pm or later as the work load dictates.
Make sure you review this language from your contract with the owner BEFORE you put the contract in front of them for signature. Don’t skim over it, make sure they understand it. You might want to have them initial that particular paragraph. I recently heard from a contractor who has an client who has called at 7:45 am and told him not to bring his crews to work that day because she isn’t going to be home, or wants to sleep in, is going out of town for a couple of days and other excuses. Don’t get trapped with a client who thinks they can do that.
Freebies
And the last thing I’m going to cover this week is the ancient issue of freebies. Tell me you haven’t heard, “While you’re here. . . !” Your contract should state that any work, of any kind, that isn’t specifically covered in the contract will require a Change Work Order. It also states the hourly rate for change work orders.
Now, when they drop the “while you’re here” line, you reach for a Change Work Order form and remind them what the contract says. This includes hanging pictures, freeing up windows and sticking doors, lubricating locks, moving personal and household items, babysitting kids, dogs, cats and other critters, installation of owner furnished items of any kind, etc. It also includes picking up any materials that the owner wants for the job, or anything else they want you to pick up and bring to the jobsite. Don’t laugh, I once had a client ask me to stop and pick up some eggs and milk for her because she was “too tired” to get them on the way home from work the night before.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations as needed.
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