Contract Questions

Discussion in 'Lawn Mowing' started by TGCummings, Jan 30, 2001.

  1. TGCummings

    TGCummings LawnSite Senior Member
    Posts: 773

    This is the week I begin work on the quarterly commercial contract I talked about a couple weeks back maintaining a local water distict's sites. I scheduled them to start on Thursday (the 1st of Feb). Tomorrow, the Building Manager would like to meet with me to go over some final points about insurance (which I have, no prob). All is well in Green Land, except...

    The contract was written with a 10% provision for prepayment. The contract is signed, by both parties. The General Manager of the district told me after signing I would get a check around the 24th to take advantage of that provision. On the 25th I stopped by to drop off a couple more proposals for more work and the check 'wasn't ready'. No problem.

    Talking to the GM tonight he said the check still 'wasn't ready' and might not be for the meeting tomorrow. In fact, he said it should be ready in 'two weeks', but could be ready tomorrow. Now, the contract I submitted stated clearly that the 10% provision was only in effect if the entire contract is paid by January 31st (tomorrow). They may very well have it ready but I'm getting the feeling of a runaround here.

    I'm the sort of fellow who stands by principle and plan to explain to them the delay (if present) is fine, but that the 10% provision will no longer be in effect. If they refuse to honor the signed document and want to pay only the reduced contract, even if late, I expect I'll walk since the contract would be in default. The money's still good, but I only submitted a 10% provision to avoid billing and collecting hassles, which this would clearly be.

    I guess my question is, am I being too hardline and shooting myself in the foot? Should I allow an extension on my 10% provision for 'reasonable delay', or should I stick with my principle?

    Being my first real commercial contract, I'd hate to let it go under these circumstances, before I even begin. However, I don't like the idea of continuing under tainted circumstances, either.

    What would you do, or suggest that I do, in this circumstance?

    -TGC
     
  2. HOMER

    HOMER LawnSite Gold Member
    Posts: 3,183

    TG, do I understand you right when you say they were going to pay you the full amount of the contract before you ever started the work minus 10%.

    If you were trying to avoid billing hassles then I guess this would be the way to go but I sure wouldn't expect this from very many commercial accounts. Billing and waiting is part of being in business and throwing away your first contract because of this sounds a little extreme. Just look at it like you'll receive the full amount now, just over the length of the contract. To bail now would almost certainly guarantee no more work from these people, but to hang in there and bill monthly would show that your willing to work with them and might get you more work in the years to come.
     
  3. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Posts: 1,415

    The 10% prepayment for entire year is a practice used by alot of companies. In the long run it is more profitable to do this. Now with the contract signed by both parties it is the duty of both parties to fulfill their end of the agreement. Otherwise that is breech of contract. Alot of contracts, including ours has penalties for breech of contract. I take it this one doesn't. The prepayment was perfect for this situation since they seem that they would have pulled the "it will be ready in two weeks" every month. I would explain to them that they have not lived up to there end of the bargain and A: you will need the money by the 1st or B: you will have to be paid full amount for the services (since they did not meet the deadline) or C: void contract due to other parties "breech of contract".
     
  4. HOMER

    HOMER LawnSite Gold Member
    Posts: 3,183

    I don't disagree at all Lonestar! I guess it would depend on how bad he needs the work, and from what I gather this is his first real commercial property. A contract is a contract no doubt. I would sure get a definite date before throwing in the towel------------if you intend to hold them to it.
     
  5. TGCummings

    TGCummings LawnSite Senior Member
    Posts: 773

    Let me clear that up, Homer. I definitely don't plan to throw the contract out if they miss their deadline and are willing to therefore be billed and pay the full amount at the end of each month, but I'm getting the feeling they're going to want to be late on the deadline by a couple weeks and still get the 10% discount. If they hardline me that way, I feel I should walk on breech of contract. Out of principle.

    Yes, this is my first commercial contract, but I still have my residentials, some handshake commercial work, and a lot of hope and promise.

    The flip side of me is saying give them a break if they come up with a good excuse and try to make it up on the extra work they promise. However, if this is a sign of things to come, is it even worth it?

    Would you stand by principle in this case, regardless of whether you needed the work or not, or does integrity have to take a back seat when 'getting your foot in the door'?

    I'm truthfully torn...

    Lonestar: I suppose the penalty for 'breech of contract' in this case is having to pay the full amount monthly instead of receiving the 10% discount. What additional penalties could be applied?

    -TGC
     
  6. HOMER

    HOMER LawnSite Gold Member
    Posts: 3,183

    I guess it would depend on how hungry your foot is!
     
  7. TGCummings

    TGCummings LawnSite Senior Member
    Posts: 773

    Let's just say my foot would survive either way. ;)

    -TGC
     
  8. HOMER

    HOMER LawnSite Gold Member
    Posts: 3,183

    I just don't want you to do something you would regret later is all I'm saying. If down the road they still breech the contract then you will still be within your rights to drop them. I would give it time and see how it plays out before getting too "legalistic" about the whole thing. As long as it isn't you that "breeches" then you always have the option of moving on so you can't lose.

    P.S. That was pretty good about the foot huh? :D
     
  9. TGCummings

    TGCummings LawnSite Senior Member
    Posts: 773

    I agree with that. However, if they give a check for -10% of the full contract in two weeks and I take it then I'm obligated to complete the terms of the contract. At some point I will either have to stand firm or back down. I'm leaning toward standing firm, but also don't want to do anything I regret later.

    I suppose, push comes to shove, I might let them slide a bit if they promise to have the check to me by a certain date, and have a damn good reason for not having it ready now. If, however, it is not available by that time I'll have to really stand firm on my principle, and expect full contract payment every month by the due date. If they get the feeling they can push me around, I may have to wait eternally for payments (which lends credence to my standing firm on the orginal contract terms again... oboy...).

    Even my wife (who, for the record, says walk if they breech!) got a smirk outta the foot comment, Homer. ;)

    -TGC
     
  10. HOMER

    HOMER LawnSite Gold Member
    Posts: 3,183

    Tell her hello for me and I just want you two lovebirds to be happy.

    Tryin' to be helpful

    Lookin' out fer ya

    Have a good nite

    Sleep tite

    Don't let them thar bed bugs bite cha
     

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