Liquidated Damages in Construction

By Michael Stone – (Sep 15, 2021)

When customers start talking about liquidated damages in construction, it’s time to ask why.

Contracts Matter; Collecting Final Payment

By Michael Stone – (Sep 1, 2021)

When you provide a dishonest client a cost breakdown of their job, things can go wrong.

Price Proposal Deadlines

By Michael Stone – (Apr 14, 2021)

All price proposals need a deadline because you never know when material and labor costs will increase rapidly.

Rapidly Increasing Material Costs

By Michael Stone – (Mar 3, 2021)

Quoting a firm fixed price is riskier when material costs are increasing rapidly, which is why your contract needs to address unexpected material cost increases.

Why Do You Need a Written Construction Contract?

By Michael Stone – (Nov 11, 2020)

Almost all conflicts contractors face could be avoided or quickly resolved if there is a clear, detailed construction contract between the parties.

Cost Plus Contracts

By Michael Stone – (Jun 5, 2020)

Why cost plus and time & material contracts should be avoided, for both contractors and building owners.

Time and Material Woes

By Michael Stone – (Feb 5, 2020)

Time and Material contracts are full of risk, especially on larger jobs.

Protect Your Time

By Michael Stone – (Nov 20, 2019)

Some people are used to snapping their fingers and having others jump. It’s irritating, but you have to remember that they’re writing the checks.

Protecting Yourself from the Protector

By Michael Stone – (Oct 2, 2019)

I’m not a fan of working with government agencies, but some situations are unique.

Final Payments and Guarantees

By Michael Stone – (Sep 25, 2019)

When clients try to change the terms of the contract, you don’t have to go along.

Contract Language That Puts You at Risk

By Michael Stone – (May 21, 2019)

Over the years, I’ve seen contract language evolve, shifting more and more responsibility to general and specialty contractors.

Handyman vs Service Agreement

By Michael Stone – (Apr 24, 2019)

Is it a good idea to have a service agreement to cover small jobs under a certain amount?

Protect Your Business – Get Paid

By Michael Stone – (Feb 13, 2019)

Avoid losing money by recognizing some of the games that building owners play to avoid paying.

Design Agreements Gone Awry

By Michael Stone – (Dec 12, 2018)

We discussed design agreements last week; today we’re going to look at them from another angle. The first step is setting the budget with the client.

Protecting Design Work

By Michael Stone – (Dec 5, 2018)

A contractor who has designed projects asked how to protect his design work.

Dodging Payment

By Michael Stone – (Oct 9, 2018)

There are things you can and should do when a client tries to dodge making payments.

Pricing Handyman and Service Work

By Michael Stone – (Apr 11, 2018)

There are two schools of thought on pricing handyman projects and service work: T&M or flat rate pricing. They both have advantages and disadvantages.

Quality Standards

By Michael Stone – (Mar 14, 2018)

“Let’s see what the contract says about that.”

Dishonest Clients

By Michael Stone – (Feb 21, 2018)

We often hear from contractors dealing with a client who, for whatever reason, has decided to change the terms of their contract. Other professionals have the same problem.

Collecting Payment from a Dishonest Homeowner – Updated

By Michael Stone – (Sep 20, 2017)

Not all of your clients are honest. There are even a few who have no intention of paying you for the work you do.

Cost Plus with a “Not to Exceed”

By Michael Stone – (Apr 26, 2017)

A contractor asked for my opinion on a request he recently received. It’s not a win-win proposition.

Let Them Know What to Expect

By Michael Stone – (Apr 5, 2017)

If you’re doing service work, make sure your client knows what to expect before you start.

Cancelled Design Agreements

By Michael Stone – (Mar 29, 2017)

A call came in from a friend recently. It seems that a client of his wants to cancel a signed design agreement.

Clients Changing the Contract

By Michael Stone – (Mar 8, 2017)

I’ve written before about clients who decide to make changes to a contract. Last week I heard from two different contractors who had to deal with this, and I want to share their stories.

Mediation or Arbitration?

By Michael Stone – (Jan 11, 2017)

Your contract should call for arbitration, not mediation, to settle disputes.

Right of Rescission

By Michael Stone – (Oct 5, 2016)

When I’m working with a group of contractors, I often ask how many are providing a Right of Rescission form with their contracts. Many contractors aren’t even aware of the document or realize its importance.

Construction Allowances: What They Are, How to Use Them

By Michael Stone – (Jul 27, 2016)

A construction allowance is a dollar amount included in the contract for a particular item. There are two types of construction allowances: material and installed.

Clients Wanting Cost Plus

By Michael Stone – (Feb 3, 2016)

Many building owners want a Cost Plus contract because they believe they’ll have more control over the total cost of the project. It’s your job to educate them on the downside.

Maintaining Your Right to Lien

By Michael Stone – (Jan 20, 2016)

At least once a week I hear from someone who can’t get paid for work they’ve done.

Documenting Jobs

By Michael Stone – (Nov 18, 2015)

There are two benefits to documenting your jobs. One is protecting yourself in case there is a disagreement about the project. The other is providing information that will help you when you’re promoting your business.

Itemization Woes

By Michael Stone – (Nov 11, 2015)

We’d like to share an email received from an anonymous homeowner. If you believe that it’s smart to provide an itemized invoice, this will make you reconsider.

Dishonest Clients; Collecting the Final Payment

By Michael Stone – (May 27, 2015)

How do you deal with a dishonest client? I recently corresponded with a contractor concerning this issue.

A Few More Contract Issues

By Michael Stone – (Oct 29, 2014)

Retainage clauses, removing the finance charge clause on the last payment, “we’ll pay you when we get paid”.  

Contract Language for Client-Caused Damage

By Michael Stone – (Oct 22, 2014)

What do you do when a client calls about a problem they created? Preventative measures make the difference between a profitable job and losses.

Business Protection for Contractors

By Michael Stone – (Oct 8, 2014)

The popular belief is that contractors are the villains and homeowners are the victims.  But if you’ve worked with the public for very long you know there are also dishonest clients.

Final Payments, Emailed Quotes

By Michael Stone – (Oct 1, 2014)

Never let your final payment exceed 2% of the sales price. And your contract should include a finance charge clause for payments not made on time.

Progress Payments: Keeping a Positive Cash Flow

By Michael Stone – (Sep 24, 2014)

We used to get three payments on jobs. 1/3, 1/3, 1/3. That’s not a smart business practice.

Money Changing Hands

By Michael Stone – (Sep 18, 2014)

It's easy to ask someone to do something; it's harder to hand over money. Your client isn't committed until they've written the first check.

Surprises Aren’t

By Michael Stone – (Apr 17, 2014)

Estimate your jobs properly so surprises don’t happen.

Things That Cause Problems, or, How to Upset Your Clients

By Michael Stone – (Mar 20, 2014)

Seven issues that upset clients. And when clients are upset, either you won’t make the sale or you might not get paid.

Contracts, Change Work Orders, Punch Lists and More

By Michael Stone – (Feb 26, 2014)

A selection of issues that should be written into every contract to protect your profitability.

Contracts to Avoid

By Michael Stone – (Feb 5, 2014)

If you are going to deviate from a standard fixed price contract, look at your approach from your client’s point of view. Make sure they know what to expect and what you’ll do.

Contract Commitment Language

By Michael Stone – (Jan 30, 2014)

Commitment language in your contracts, payment schedules that help cash flow, right of rescission language. With a few extra comments.

Contracts – Dates, Times, Conferences

By Michael Stone – (Jan 22, 2014)

Many construction-related disputes can be avoided with a well written contract. Here are a few of the things that need to be included.

We Want To See Your Receipts

By Michael Stone – (Oct 2, 2013)

What if you agreed on a price, now customer wants all receipts for material? Without a clearly written fixed price contract, it's a problem waiting to happen.

A Poorly Written Contract Will Cost You Money

By Michael Stone – (Jul 24, 2013)

Too many contractors use a poorly-written construction contract, or no contract at all, leading to different interpretations of an issue.

Making Selections for Their Project

By Michael Stone – (Jul 17, 2013)

If you're a remodeling or new home contractor, how can you get clients to make their selections before you write the contract?  Make it easy for your client.

There is No Industry Standard

By Michael Stone – (Oct 30, 2012)

Don’t take any job where the client tells you how much you can charge for your work.

Guidelines for Success

By Michael Stone – (Oct 30, 2012)

Guidelines to a more successful construction-related business.

Contract Cancellations

By Michael Stone – (Sep 17, 2012)

Cancellations happen, even with the best of salespeople. Clients have all kinds of reasons to cancel an agreement, and you need to be prepared.

Payment Schedules for Cash Flow

By Michael Stone – (Aug 22, 2012)

A good payment schedule keeps you paid for the work you are doing. If you're using a 1/3, 1/3 and 1/3 schedule, you are financing most of the job out of your pocket.

Know Your Cash Flow Needs

By Michael Stone – (Jul 11, 2012)

Contractors have cash flow problems for two major reasons: poor money management, and poor payment schedules.

Cost Plus – A Homeowner’s View

By Michael Stone – (May 15, 2012)

A very nice gentleman called me last Friday. He related a story about his home remodeling project. It was done a Cost Plus job, the "plus" was negotiated at 18%.

Use the Right Payment Schedule

By Michael Stone – (Sep 13, 2011)

If you want positive cash flow in your construction business, make sure you're using the right payment schedule on your contracts.

Sending Invoices for Construction or Handyman Work

By Michael Stone – (May 16, 2011)

Invoicing is one way clients delay paying. "Thanks for doing that work, send me an invoice, okay?" Why do contractors agree? Maybe they believe everyone does it.

Surprises on a Construction Job

By Michael Stone – (Jul 8, 2010)

A homeowner commented on a forum. He’d been told to add $3 – $5K to a job just to cover the extras that will come up. He was under the impression this is normal.

Do Construction Jobs Have a Life Expectancy?

By Michael Stone – (Feb 17, 2010)

Does a job have a “life expectancy”? I believe it does and you should be aware of the warning signs.

No More Mr. Nice Guy

By Michael Stone – (Mar 25, 2009)

I took a call from a married contractor with four young children. He can’t collect the final funds due from an owner for a large job. They are about to lose everything.

Downpayment on a construction job

By Michael Stone – (Mar 29, 2008)

Got a phone call recently from a contractor doing a job in the $150K range. Everything is fine, contract signed, and the job is going great.

The Danger of Short Contracts

By Michael Stone – (Jan 5, 2008)

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.

Why You Need a Well-Written Contract

By Michael Stone – (Jan 3, 2008)

A client decided to change the rules of their contract. She decided not to pay the full amount or on time as the contract specified.

Write a Clear Contract, Protect Your Assets

By Michael Stone – (Jul 23, 2007)

I am serving as an expert witness this week for a new home builder in our area. There are many issues in this particular case, but there is one overriding problem.

Contracts for Construction Jobs – Even Small Jobs?

By Michael Stone – (Feb 22, 2007)

A question arose this morning on a call from a contractor. Should you write a contract on all the jobs you do, regardless of the size of the job?

Business Education and Construction – Willing to Learn

By Michael Stone – (Jan 23, 2007)

At a recent class, I was covering the basics of getting paid for additional work orders. I gave an example to emphasize the necessity of getting paid for your work.

Provide a Service, Make a Profit

By Michael Stone – (Oct 19, 2006)

A young businessman called. He was in a state of shock after checking his books over the weekend and found over $11,000 in receivables, much of it over 30 days.

Cost Plus, Cost+, Time and Materials, T & M

By Michael Stone – (Aug 21, 2006)

A coaching client was working with a potential customer who wanted a remodeling job on a cost plus basis instead of a fixed fee contract.

Proposals for Construction Work

By Michael Stone – (Apr 18, 2006)

Just a quick reminder. Be sure to put a limit on the length of time your proposals are valid. That time should be a maximum of 3 working days, no more.

Scroll to Top