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Construction Programs & Results Inc

We Like to See The Good Guys Win!

The Danger of Short Contracts

by Michael Stone

I often hear from contractors having problems with their customers. Many of these problems are because of the written contract they use for their jobs.

Many have a 1-3 page contract they use with their customers. That leaves a lot of things unsaid, and as sure as the sun comes up, the customer gloms onto something that is not in the contract. They then decide that the contractor owes them the item and it is not open for discussion. They have gone so far as to say if the contractor won't "honor the contract", they are going to sue.

Maybe during the sales call, the owner and the contractor talked about some particular item. They decide not to include it, normally because of price, and they go on with the job. The owner, often overwhelmed with all the details of putting a job together, later forgets that the item was dropped, and as sure as little green apples in the spring, somewhere during the job they remember the item and want to know why it hasn't been installed.

You remind them of the conversation, and the "Ya Buts" start. Ya But you said blah blah, blah blah. I'm not going to pay you any more money until . . .

Gang, one, two or three page contracts do not work today. You have to write a contract that covers the job and specifies everything you are going to do or not going to do. If you don't spell it out, it can cost you.

Here is reality: You can't put the basics of a good contract, even in 10-pt type, on a 3 page contract. There just isn't room. The language covering all aspects of a verbal change order requires almost 3/4's of a sheet of paper. Many states are now requiring anywhere from 2 to 4 additional pages of legalese that must be supplied to the owner with your contract.

If I were writing a new home contract, using our Fast Track Proposal Writer software, it would take at least 45 pages, probably more. A remodeling job of $100K requires at least 35 pages. A smaller remodel job ($15-25K) would be 15 to 20 pages in length. The more detail, the better. C. Y. A. !

When you do something in your business that puts you at risk, like writing a skimpy contract, you not only put your company at risk, but your family, your home, your marriage and your health as well. That is a reality of life. I sincerely hope you will reconsider your approach to writing contracts before you face that customer or that job from hell.

Comments

I have been using Michael's Fast Track Proposal Writer now for about a year and a half. Since I have started using it, I have not had a single issue with a client. And yes, my remodeling contracts run 28-35 pages. People look at them, giggle, read them, ask questions, and sign. I haven't even had anybody sign the recision notice. It just shows that you know your business. The only time that I have had an issue was when I did a "friend" a favor and it has come back to haunt me. Please, please, please pay attention to this post by Michael. It will save you, literally, thousands of dollars in litigation.

Thanks, Michael, for all of your continued support of our industry.

Jason Scheurer (not verified) /

Michael's FTPW is the only way to go. I have been using it for over 6 years now and it has saved my ASSets plenty of times. What's funny is when I used to have skinny Agreements, I had the Owner tell me what to do. Once I started implementing the FTPW, my Agreements are at least 10 pages for just a simple bath remodel, and like the Gentleman above, the Owner's giggle, laugh a little, then tell me my company's agreements are the most detailed that they have ever seen. When they sign I know the job will go great, if they complain and try to revise with their own language, then I walk without a signature. It's that simple. You just can't risk it. Michael, your FTPW is one of the best things that I have ever purchased for my company. Thank you very much for saving me, my marriage and company all in one swoop!

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