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Multi-year contracts

Discussion in 'Business Fundamentals' started by Rc2505, Feb 8, 2011.

  1. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    I have been plowing for 18 years now, but have never had a multi year contract. So, I have a question or two about them, and am looking for a few answers before I type it up and send it off to an attorney. First, do you have any special languages in your contracts for multiple years? (ie price increases, fuel surcharges, cancelation proceedures, and so on). Second this is only a per push contract, not a seasonal, so do I need anything special for that?
  2. bristolturf

    bristolturf Senior Member
    Messages: 435

    Just be sure at the top you write out that its a Two Year Agreement, effective November 1, 2011 to April 1 2013 or what ever the dates are.

    If there is a price increase I would put it like this: Year 1 November 1-October 31 prices will be as followed: Snow Plowing per push $150 Salting per Application $125 Sidewalks per Push $50 Ice Melt per Application $30. Then if you want to increase everything the second year, say effective November 1 or the second contract year, all prices listed under year 1 will be increased by 20% or something.

    I would keep the fuel surcharge at what ever it is now in your agreement. Something like, since we can not predict the cost of fuel, we reserve the right to increase the totals listed above no more than 5% for ever x $ the price of fuel increases.

    Also make sure to cover your but on salt price increases or shortages. Something like
    Salt and Ice Melting Product pricing is based upon market availability and cost. Salt is a commodity and therefore prices may increase and/or salt may not be available for application at all times.

    As far as cancellation since it wouldnt be a seasonal, its simply writen notice provided by the canceling party 30 days prior to the cancelation
  3. 32vld

    32vld Senior Member
    from LI, NY
    Messages: 622

    As a customer why sign this contract? All it does is guarantee that he's going to be paying more the next year. There is no incentive to sign.
  4. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    That's about it. I have some 2 years deals out there and I just keep the price the same for the 2 yrs then raise the price at renewal time.