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Termination fees / cancelation fees

Discussion in 'Commercial Snow Removal' started by silvetouch, Nov 28, 2005.

  1. silvetouch

    silvetouch Senior Member
    Messages: 336

    We currently have a customer that has a problem with our prices and wants to cancel on us. We have a cancellation clause that states that either party may cancel the contract with a 30 days notice and that all balances must be paid in full immediately. It also states that we may impose termination fees upon terminatin of this contract. My question is, being that I didn't put an amount in there, what is the most that i can charge for a termination fee. I am normally all about screwing people out of money, but we serviced this company starting the middle of last year because a low baller screwed up on them and they screwed us out of some money last year, but i let it go because #1, we made quite a bit off of them last year (haha) and they said they were going to use us again this year. Anyway, any help would be appreciated.
  2. phishoook

    phishoook Member
    Messages: 79

    Are you paid per plow, or per month, or per year?
  3. silvetouch

    silvetouch Senior Member
    Messages: 336

    i am paid per plow, per salting of lot, per bag of calcium used on walks, and hourly for shoveling walks.

  4. SnowGuy73

    SnowGuy73 PlowSite Fanatic
    Messages: 24,868

    Monthly = one month service

    Per time = two plows worth

    To cancel services..:nod:
  5. silvetouch

    silvetouch Senior Member
    Messages: 336

    Yeah, thats something what i was thinking too.
    My only concern are me "legal options". I don't want to get myself screwed by some sort of technicality.
  6. Will this "termination" result in lost revenue for you or can you pick up another account/accounts to stay revenue equal?

    If you can replace the revenue the why not just let it go? If the customer is a problem then just consider it good riddance.

    Is there really a need to have your (former) customer pay for services not rendered? A 30-day's notice should be sufficient. If you get snow events in the next 30 days you will service the account, get paid and be happy. But on top of that you'll want your client to "bleed" additionally...why? You already said you made him hurt by taking over the low-baller's business. Isn't that enough?

    Why do people think that they deserve "something for nothing?" Instead think Karma... and stop thinking like the cellular phone companies.

    Last edited: Nov 28, 2005
  7. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    See now I disagree with P lo. I have had several "problem" customers with lawn care and I finally got sick of it and put in our contracts the same thing, a termination clause. I got tired of people wasting my time bidding jobs, getting the jobs and in two months have them cancel because they were in a tight spot trying to find a professional lawn care company. And at the last minute when a "lowballer" came around it was good riddens to us. My fee is one (1) months worth of service for lawn care and a flat $100.00 for plowing no matter if its $15.00 or $55.00 a push. I honestly have never had to use this for plowing but its there just in case.
  8. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546


    No amount noted, you can't charge anything. Besides, what are you going to do, take them to court? It would cost more than you'd get. Small Claims court? How much are you going to claim they owe you? Nothing. They could win easily.
  9. SnowGuy73

    SnowGuy73 PlowSite Fanatic
    Messages: 24,868

    Well the thing is, a contract is only as good as the guy who signs it. So you may et your money, or you may not. :cool:
  10. Big Dog D

    Big Dog D PlowSite.com Addict
    Messages: 1,134

    Do you have everything you are owed for services rendered? If so be happy, and don't take em back again!
  11. silvetouch

    silvetouch Senior Member
    Messages: 336

    OK, 1st of all i'd like to clarify some things.
    When i took these banks on as a customer in the middle of last season, it was because the company they currently had screwed things up at their locations because he was a lowballer and had no idea what his actual costs were. The bank decided to go with our company because of our good reputation in the area, regardless of our prices that were slightly higher. And yes, this will be a signigicant loss in revenue for our company. These are 3 separate high end accounts. No, its not a huge shopping mall, but they are decent size. And no, most likely i won't be able to make up that large loss for this season. No i haven't gotten all of my money from them yet. Technically they still owe me $1300 from last season because they wanted to argue over .03 inches and tried to say they wasnt any salt applied THREE times. And regardless of whether or not i have another client to replace these locations for this season, we have a company policy. There is a reason that cell phone companys are sucessful, along with auto makers and their lease policy's, and a long list of companies that have memberships. Every legitimate business has a company policy and in order to remain sucessful, they must abide by these policys (within reason). Yes, there is always certain exceptions, but for the most part, we must have some sort of terms and conditions as a policy not something made up off the top of our head to try and be a nice guy.
    This post has been long enough already. I'll respond back to any other intelligent posts.
    Thanks again to all.
  12. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    It comes down to documentation. If you have documentation that shows you provided service and were not paid for it, you could file a claim through Small Claims Court. If you do not have documentation, your chances of winning are not good. If you do not have documentation of a cancellation fee and that they argreed to it, it is not likely that you would be able to collect any such fee. Yes, businesses have company policies. But they also have documentation of what those policies are (the charges and penaltes) and that the customer agreed them.

    If my previous post was not intelligent enough, I apologize. I just figured it was short and understandable without the need for verbosity.
  13. silvetouch

    silvetouch Senior Member
    Messages: 336

    1st off, just want to say that YOUR post was intelligent.
    All of our contracts are documented and files are kept. Our customers have copies of both are submitted bid and their signed copy. Also, each time we service an account, we keep record of weather conditions, date, time in, time out, salt amounts, etc etc etc. I think we are a pretty fair company, we are not out to rip anyone off, but we are not a fly by night operation (not suggesting that any of you are). I have been there plenty of times in my 1st
    couple of years where i didnt' have things in writing and got screwed out of money. I always get everything in writing now as to protect both ourselves and our customers.
    thanks again for everyones time.
  14. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Ok, Andy. Then I'd say you're in good shape except for the termination fees. Since there was apparently no amount noted when they signed the contract, I'd say you can't just put an amount in now. But that's just an opinion and we all know about opinions:drinkup: .
  15. silvetouch

    silvetouch Senior Member
    Messages: 336

    Yeah, I'm going to check with a few attorneys over the next week or so and see what i can come up with. I know each state has its own maximum amounts for late fees and penalties and what not. I'm sure there are similar standards for termination fees.
    This is just 1 big mess, I'm a fair guy, but I don't get screwed over especially when it comes to money. Wait til i get ahold of my body with the big water tanker on a cold freezing night. HAHA, what a mess a parking lot would be.