Estimated reading time: 3 minutes, 2 seconds
Contracts, or agreements as I like to call them, should be like a good pair of shoes. They should fit.
Most general contractors start off with a buddy’s contract or something that came off the internet. Not that this is a bad approach, but they are often filled with a bunch of legal mumbo jumbo or they are not a good fit for the project at hand.
Other common faux pas include, having an agreement that is too short, and not covering all of the details that could possibly affect a project. At Levco, our agreement is 13 carefully chosen pages.
What I have learned while remodeling here in Boise, Idaho is that the most important part of a good agreement is that it should be based around a clear and complete DOW. Barring that, you could have the best agreement in the world and the whole project could fall apart.
I was recently asked to share my Levco Remodeling agreement with a contractor out of Pennsylvania, and I did. My point is that I have a distinct advantage in that my contract has been reviewed by my attorney and it has been used hard for over 8 years.
This means that it has been battle tested to a point. I have had it shredded several times by attorney clients and I have used it to stand my ground occasionally when necessary. No matter how good or bad it is there is always somebody who will quickly condemn it as not tough enough or difficult to enforce if trial tested.
My key contract components include:
- Conflict resolution
- A payment arrangement
- Penalties for non-payment
- Change Order process
- Hidden defects
- Lien release process
- Guarantee period
- Advertising explanation
- Termination for cause
- Time for construction
Over time, I have added clauses addressing real situations specific to my business. I have also made sure that it was written as if I was saying it. I go through it paragraph by paragraph when I present it, to make sure that it is clearly understood.
Another cool thing that I had overlooked until the contractor in Pennsylvania reminded me is that my agreement is conversational and is written in my voice and style. Unlike most lawyer generated contracts, mine is easily understood and friendly. Several clients have complimented me on how my agreement set the stage for a good working relationship just before we get to the business of swinging hammers.
Be aware of the laws in your area, as not all areas have the same rules. What works in Idaho may be illegal in Wisconsin.
I am a firm believer that if everyone has the “exact same understanding” of the duties and responsibilities, entering into an agreement to remodel should be a safe and comfortable process.
As I am solidly in my second decade of this remodeling business I have had my share of bad clients. Those I wished I had never signed up. This makes me want to set aside my great friendly Remodeling Agreement for a technical legal one that I had produced a few years ago. Having been burned about once a year, I want to stiffen up my legal position and remove ambiguity once and for all.