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What is a Contract Worth?

Discussion in 'Business Fundamentals' started by Winterized, Jan 29, 2009.

  1. Winterized

    Winterized Senior Member
    Messages: 120

    Reading so many people posting about the value of having a contract... and yet reading so many posts about the client breaking a contract... is a contract of much value?

    I am a solo with only a handful of snow and lawn accounts. I have a very detailed AGREEMENT that must be signed before I do ANY work for anyone. It spells out the work to be performed, my liability etc. etc. I do have insurance and make a point of telling people that.

    Is the value of a contract mainly to bind the client for a specific amount of time for services? It seems everything else could be done with what I call an agreement. It would also seem after reading so many posts here that the winner of a contract dispute is usually the one with the deepest pockets.

    If a nasty dispute arose, and the service provider did prevail it may sour the working relationship to the point of both parties wanting out anyway. Not trying to start any kind of argument over this... just want to understand... I may be doing the wrong thing not having a signed CONTRACT. Thanks
     
  2. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    Reminds me of a saying

    Do you want to be im bed with someone that doesnt want to be in bed with you
     
  3. ScnicExcellence

    ScnicExcellence Senior Member
    Messages: 352

    that depends on how hot she is ROFL:jester:
     
  4. Winterized

    Winterized Senior Member
    Messages: 120

    Quote:
    Originally Posted by cretebaby
    Reminds me of a saying

    Do you want to be im bed with someone that doesnt want to be in bed with you
    that depends on how hot she is ROFL



    And the price.....
     
  5. Kunker

    Kunker Member
    Messages: 96

    So do most people view a contract as way to get some compensation out of a client for dropping them? Threaten them with legal action if they don't pay up?
     
  6. scottL

    scottL PlowSite.com Addict
    Messages: 1,600

    A contract is something that defines working terms, expectations and limitations. The one guy said it right .... Do you want to be in bed with someone who hates you? Not a lot of value burning a bridge.

    Now if you have costs specifically related to that client like extra salt, rental's , etc. then you can talk with the client explain your position and I would say most will work with you.
     
  7. Brant'sLawnCare

    Brant'sLawnCare PlowSite.com Addict
    Messages: 1,752

    I think if you have a contract that you both signed, a judge would be more likely to side with you, unless the other party can prove that you didn't meet the requirements.
     
  8. Runner

    Runner Senior Member
    Messages: 957

    A contract and service agreement are essentially the same thing. The term "service agreement" is just a more politically correct term (and is more friendly sounding). as far as the release obligations, that is all in the terms of the agreement. Depending on what a particular service is worth, some can be written with penalty clauses (known as early release fees), and some may not...just terms of advance notice. This is usually just to protect some costs...not really "penalize" the customer into influencing them to stay with a particular service.
    One of the biggest factors and reasons for an agreement is the protection of the contractor in such events as damage or injury, and the expectations of both client and contractor in such event.
     
    Last edited: Jan 30, 2009
  9. QuadPlower

    QuadPlower PlowSite.com Addict
    Messages: 1,056

    All of my "contracts" say "agreement" at the top of them for the same reason Runner said.

    If two parties signed it, then its a contract. What ever it says in it is what the judge will base a ruling on.

    IMO one of the biggest factors for having a written agreement is to put everyones expectations in writing. I tell them what I'm going to do, for how much, what I expect from them, and other items.

    They read it, signed it, I do the work, they pay me.
     
  10. TPC Services

    TPC Services Senior Member
    Messages: 875

    Like what runner said contract and agreement are pretty much the same thing I will not do anything with out one or the other, Two reasons one like he said it's really good to have one to recoup your cost for materials and rentals that you go out and pay for in advance of a project and they change there mind and do not want to pay the added expenses of add materials or change of materials and things go sour. for example with you go out and spend $50,000 on sand and rd salt and then they change there mind to want liquid. you may be able to use that up on other places or be able to take it back to the quarry, plus you are going to want to recover your time it took to get the materials and cost of wear and tear on equipment, gas.
    they other reason is I have one for all my subs with a non compete in that way they can't go out and steal your work away or give it to another contractor because they had a issue with out this Industry is already hard enough to get work with all the low baller's out there.
    I might be a a#% to work for but that's why I pay good and bonus's out to the guys that go out of there way to put up with me and the things I ask them to do!! not counting the appreciation party's I do!
    we work hard and then we party hard also!!