|Home » Forums » Business » Message||Login|
You are not logged in. Consider these WOODWEB Member advantages:
My contract, theirs or both?1/2
Hi, I've finally been landing whole house jobs in the last few years through GCs. In the past, my projects were in the max $20-30k range and now in the 50k-150k range. I've been told by other shop owners that it's usually us that sign theirs (cab shop signs gc's). If that is the case, do I just hope for the best? Seems odd
Hope for the best? I can't stop chuckling! The GC sure hopes you do. Get your own contract. How else are you going to dictate payout schedules and, well, everything?
I guess that I am very old school in my business. I have been building cabinets for 30 + years and have never signed a contract on any residential work. I do not think it is anything wrong with contracts, I just believe a mans word is worth a lot more.
Despite Bob's trustworthy nature, I think most would agree having a contract in place is a good thing, even though the character of the people behind the contract is what is important.
Yes, that last bit was meant to make you chuckle Rich. Haha. Bob, I too feel that a handshake and a man's word should be all that is needed. Unfortunately, in this day and age many gcs in my area (San Francisco) send out lengthy "agreements" or "contracts". I've been sending mine out as well. Last year I had a dispute with a project manager before any work ever started (except the shop drawings). I wanted out and got out of the contract thank god (at a loss for drawings and time on site measuring etc). Since that job, I am nervous about such things as finding out the project manager is an incompetent barking dog scrutinizing every last crumb of a detail (nothing is perfect nor am I) and being unable to get out of the contract...so I put some such wording into my proposals. I started as a carpenter 24 years ago and switched to making cabinetry and furniture about 16 years ago. Been self employed (and self taught) for 18 years in 3 states and 2 countries for the record. Thanks for your input
It never stops, does it? Every once in a while, someone wants what is essentially legal advice about contracts or whatever from a bunch of guys who aren't lawyers.
That's a very bad idea.
Get yourself a lawyer. Even if it's just for an hour or two to answer your questions. The average lawyer is in a worse position (too many of them newly minted in the last 10 years) than the average cabinet guy -- they need the business and will probably give you an initial hour or two for free just to establish some sort of a preliminary relationship.
If you don't have a CPA, get one of those, too.
Trying to get ad hoc legal or accounting advice from a board full of wood professionals (or any other board full of professionals who aren't lawyers or CPAs) is a fool's errand.
Handshakes and someones word aren't necessarily worth a tinker's dam when it comes to nut-cutting time and money is at stake. Spend a few bucks up-front to avoid more expensive problems down the road.
I'd love to have the serious dollars I've spent on lawyers and CPAs over the years in various businesses back in my pocket, but every one of those dollars spent saved me money.
Winging it or guessing is certainly cheap in the short-run, but it may not work out well in the end.
Something you should consider is starting the job by giving the customer a stack of purchase orders for changes.
Rather than you being the supplicant petitioning them for extra money to fund change orders try reversing the relationship.
Each time they want to deviate from original scope of work have them create a purchase order requesting this change and authorizing payment for same. The simple act of giving them this stack in the front end will go a long way to policing the relationship.
That's a good one cabmaker. Could you share what such a purchase order looks like?
This is actually quite simple. You merely stipulate in your contract that all requests for changes to scope of work shall be initiated in the form of purchase order created by client's representative. The General Contractor is the person who is invoicing 15% for management fees. It is a very easy case to make that this is a "project management" function.
Back in the days before the inter-web we used to fill these work orders out on something called an NCR triplicate. This was a three part form that allowed you to press really hard with a ball point pen to make duplicate copies. Today, of course, these types of transactions are conducted electronically.
The purpose of you handing the client/contractor a stack of the NCR triplicates is mostly pro forma. It puts everybody on notice that you do intend to invoice for increases in or changes to scope of work. Whether or not you actually follow through with this depends on the politics of each scenario but the triplicate paperwork provides a metaphor that everybody can understand.
We modify the customers contracts and return them that way. Change orders are always problematic whether they are paper or electronic. The is always the rush, it can't ship until ---. If you don't know the GC or customer insist on a Change Oder before doing anything else, it speeds the process.
Thanks fellas. I really appreciate it