Renewal Clause | Interpret For Me

Discussion in 'Business Operations' started by mcw615, Feb 28, 2012.

  1. mcw615

    mcw615 LawnSite Senior Member
    Posts: 473

    I am looking to add a renewal clause to contracts - I ask you interpret what it means. I have worked to 'simplify' it as much as possible, but looking for a 2nd, 3rd, 4th.... opinion to be sure it is simply understood. Particularly the 30 day notice ordeal. Here it is....


    The contract period begins on (date) and is for the period of (1) year ending on (date). The contract will automatically renew for an additional twelve month period, unless either party notifies the other of their intent not to renew by giving a minimum (30) day notice prior to the existing ending date, or either’s wish to change the terms of the agreement to include scope of work, price, etc.



    Or if anyone has any recommendations of what verbage I should add, modify, or delete to have the clause effective, yet in the most simple way possible so it does not sound too "legal technical".

    Many thanks....
     
  2. 205mx

    205mx LawnSite Silver Member
    Posts: 2,346

    Sounds like services that I complain about
     
  3. mcw615

    mcw615 LawnSite Senior Member
    Posts: 473

    ? .
     
  4. fireman gus

    fireman gus LawnSite Senior Member
    Posts: 517

    Sounds good to me. We have a similar statement in our service agreement forms however with the last statement for service of the year we remind the client of this agreement so there is no problem.
     
  5. mcw615

    mcw615 LawnSite Senior Member
    Posts: 473

    I was considering of course doing something similar. I send out periodic newsletters and always a What's New letter at the end of every January. I was looking to as well hint something along the line of will be starting our spring work on your properties and everything to give the idea we are planning to start work....and not specifically put in their heads, "if you do not want to automatically-renew for the year you need to contact us in writing by February 28th. And another thing, don't NOT show up any throughout the winter...especially when it comes time for renewal, do property checks and leave a note on the door "Was just here checking on things...if I missed anything that needs my attention, please let me know! Also, in about two weeks a crew will be here to get up some leaves that have blown since Christmas and will be pruning your Crape Myrtle(s), grasses, etc."

    I guess why I was looking for feedback was before we had a clause of something like this, but was for if someone wished to get out of the contract, and a few people thought they pay like a cell phone monthly and after November they want to cancel services...and I would explain they would be invoiced for all the work performed to such date, and all "deposit payments" would be credited and you will have a good balance around xxx.xx. Also, I don't want to leave that option anymore...it's a contract,I discount a few services to give you a better price and in return you agree for us to perform all of those services for the entire year, so I was trying to phrase the new clause as only thirty days from the twelve month ending date.
     
  6. stephen424

    stephen424 LawnSite Senior Member
    Posts: 730

    Here's my take....

    Just eliminate the renewal clause all together. It's kind of pointless when you think about it. This isn't cell phone service, it's lawn maintenance.
    When I first started, I had all this fancy verbiage in my "agreements" (I don't call them contracts because they sound too binding).

    Shoot me a PM with your email address and I will send you a copy of my simple, yet professional agreements. No verbiage about 30 days this, renewal that.

    If you have less than 60 customers, just make a phone call in December and another in January, stating that you'd like to continue blah blah blah. Or if you have new school customers, send an email.

    Honestly, are you going to sue someone who forgot to cancel with you within the 30 days (maybe they lost their job or something) or hold them accountable to the contract because it automatically renewed?
     
  7. kennc38

    kennc38 LawnSite Senior Member
    Posts: 293

  8. mcw615

    mcw615 LawnSite Senior Member
    Posts: 473

    No, never boldly call them contracts to the customer, call them agreements. As doing a project...never costs, investments. Now I do like your point is you want to let them know you want to again perform services for them the next year. My take is not to con them into a whole another year by not giving notice, it's more for convenience for both parties. Out of the 80 maintenance contracts, that's a whole lot of phone calls or e-mails to try and chase people for business, we generally loose 1 or 2, but it's just the hassle for me to go through each contract to modify the dates and resubmit them out, and wait for them to come back in. And there are a handful of clients who are just busy or forget each year about mailing it in, or call why aren't you mulching, etc. and you explain we have not received the contract.....more than the majority are sure they want to do business again for another year and look at it as a hassle, or option. Now if someone calls me in May and for whatever reason wants out of the contract, job loss, moving, or just flat out not happy (which must be hard, and I always go the mile to try and make up for it) I explain what we need to do - we have performed these such services so far which I will have to go through and individually invoice, and your last three payments will become a credit...but never 100% give them the option of hmm, sign or not to sign...better they know they are signed up for another year, unless they contact us. Again, we are lawn and landscape contractors, not cell phone providers. But does your cell phone after your two year contact send you a renewal and if they don't get it back by the end of the contract they cut off your service? They leave it as if you want to cancel after your two years you can contact them, or cancel the contract for a fee (which I never do if circumstance arised.)

    Maybe the better approach is an automatic renewal clause, but still in December survey customers of how we have performed so far in the year, and make phone calls/e-mails/letters in January as you said stating we hope we have met or exceeded their expectations for the prior season and hope to do business again with them for another year (just good customer service), and how it is much appreciated. Folks like you are a large contributor to the on-going success here at.....

    But yes, I will send you a PM, I'm always optimistic.
     
  9. mcw615

    mcw615 LawnSite Senior Member
    Posts: 473

    Thanks for the link! It was a great article. Yes, that was one of my first lessons learned a few years back was have a very specific detailed contract. All of my contracts are about five pages when considering each topic of turf, weeds, leaves, mulching, bed enhancements, irrigation, fertilization, aeration and seeding, parking lot maintenance, etc.
     
  10. FLC2000

    FLC2000 LawnSite Bronze Member
    Posts: 1,840

    I send out letters to all my customers in early Feb letting them know whats new for the year, price increases, etc.

    I let them when I expect to be starting which is around mid to late March and I also let them know we service on a year to year to basis with no renewal needed. Also if they want to cancel to do so by March 1st. If they choose to cancel after that we require 30 days notice.

    Pretty simple. No need to complicate things.
     

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