Does anyone give a 30 day out on a contract?

Discussion in 'Lawn Mowing' started by JLC, Aug 22, 2001.

  1. JLC

    JLC LawnSite Senior Member
    from IA
    Posts: 467

    I've got a good commercial customer who wants my service, but wants a 30 day out on my contract. My thoughts are that if you sign a contract you sign it for the season. If they don't want it they can pay by the cut. Any thoughts?
     
  2. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    I empathize with your concern about the duration of the season.

    However, Do you pay for your ISP by the season??? What if you signed up for AOL in January and were able to upgrade to RoadRunner in May. Should you be stuck as a Lammer for the rest of the season??? I think NOT!!!

    The same applies to your services. YES. You should have a clause about the clients rights to cancel.

    Some say that once they have written notice, the service is concluded as of the next business day. Others will tell clients that if they receive a call 24 hours prior to the scheduled date of service that this is sufficient.

    You should also try to keep your contracts flexible so that as their budgets increase or decrease you can still sustain the account.

    Hope this helps.
    Kris
     
  3. There is a wide variance in the "contracts" or "service agreements" in the landscape business.

    A "contract " is generally a specified term of duration which needs to be fullfilled to satisfy the terms of the "contract". A lot of contracts have 30 day out clauses. that changes it from a contract to a "service agreement".

    Most "contracts" are really service agreements if they have a 30 day out clause.

    Where most landscapers go wrong is not keeping track of "services rendered to date" and having a clause requiring a client to pay for all services rendered to date if the contract is not going to run to term and allow the full recovery of the monies owed, normally recovered in slow season if contract runs to term.

    You provide more services in early and late spring that you get paid for. Client cancels then, they get billed for everything you have done, so you get paid for the work performed.
     
  4. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    If we submit our proposal which will become the "Agreement" upon signing it consisting of a Cover Letter, Company Information (uniforms, billing, insurance info etc.), Description of Services, Costs of Services.

    If we mention about the Cancellation of Services and Rendering of Payment in our Cover Letter only does this in fact still count as part of the "Agreement" they sign with us???

    Or do we in fact have to list our pre-requisites under the Billing heading of our proposal as well???

    Here is an exerpt from our cover letter in question:
    Operating budgets are sometimes increased or decreased after our initial discussion. We allow our clients to put together and later change if necessary, a grounds management package so it best suites your company's requirements at any time. You may cancel our “Agreement” by notifying our office in writing, or calling us 24 hours in advance.

    Our Billing Clause:
    BILLING
    Fees for services will be billed upon completion. Terms are: 2% 10 days/Net 30 days.
    If monthly re-billing is necessary, A FINANCE CHARGE of 1 ½% per month (18% per Annum) will be charged to all past due accounts. A Minimum Finance Charge of $5.00.

    Any bill not receiving full payment within 45 days shall be considered delinquent. All services will be temporarily stopped on any delinquent account until FULL payment for all services rendered have been received.

    If an account must be turned over to a Collection Agency, the client will be responsible for ALL costs involved in collection of said account.


    Just curious.
    Kris
     
  5. I would include any payment information in your billing section as well as in the cover letter.

    If you have anything in the cover letter you want included as part of the contract, I would insert a clause that states the cover letter becomes an attatchment to, and part of the contract. Indentify it as such and anything else, such as specs, frequency of services, etc.

    Many contracts have schedules such as "A", "B", etc that become a part of the orginal contract. Very common in the industry.
     
  6. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Thanks for the help Dale. :)

    I will do some tweeking to our "Agreements" which will be going out in two weeks to existing clients for next years services.

    Kris
     
  7. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,712

    30 day door swings both ways if you word it to say "both parties shall have the right to cancel..."

    If you have a problem with them, you too can opt out.
     
  8. longslawn

    longslawn LawnSite Member
    Posts: 201

    We give all customers a 30 day out. They or us can cancel with a written notice. If contract is signed in spring, then a termanation clause is attached explaining that the payments may be less than services rendered and that additional payments may be due. The customer must sign. If signed in lat season and service should not exceed payments then no termanation claused is sent. All customers sign a 12 month contract for service.
     
  9. dhicks

    dhicks Member
    Posts: 771

    I give 30 day out contracts. It's standard business practice and what is nice is that it works both ways. Suppose you get hurt and cannot work. Are you going to pay someone else to mow while your laid up in the hospital for the next 12 weeks? Without a 30 day option you may be liable!!!! Go ahead and give 'em a 30 day option. It's no big deal.:cool:
     
  10. Likestomow

    Likestomow LawnSite Senior Member
    Posts: 997

    The purpose of a contract is not to hold a customer captive, but to determine the work to be done and how it is to be paid for. A well worded contract can give you legal rights that you would not have without it.

    If you include seasonal items, like mulch, aeration or reseeding within a 12 month contract, you should have a clause to allow you to recoup any costs that haven’t been paid for yet. The following is a sample paragraph:

    “The equal monthly installments for Basic Horticultural
    Services included in this Agreement are not representative
    of the actual work performed on site each month. In the
    even of cancellation, the Owner/Manager agrees to pay
    Contractor any amount above and beyond the monthly
    installments for actual work performed. The chart below
    illustrates the percent of the Agreement’s value performed
    in each month, as it related to Exhibit A and B.
    Enhancement services included in the monthly installments,
    such as seasonal color and mulch, are included in the chart
    and will be add to the value performed, if the work has
    been completed.”
     

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