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Termination Clause

Discussion in 'Starting a Lawn Care Business' started by Lane65, Feb 1, 2008.

  1. Lane65

    Lane65 LawnSite Member
    from Florida
    Posts: 8

    I'm in the process of finishing up my Service Agreement and need some advice in reference to adding a termination clause or not. Would it be appropriate to include a termination clause to allow the customer an out with a 30 day notice and if so should I apply a penalty fee for the remainder of the contract?

    How do you guys handle that?
  2. fertguy2008

    fertguy2008 LawnSite Member
    Posts: 82

    Our agreement required a 30 day period to resolve any issues with service on our part.
    We used to require a 45 day written notice for cancellation.
    We live by the motto, "Bill early and Bill often."
    Customers were billed at the beginning of the month and payment was due by the 15th of the month for the month which we were curently providing service in.
    Maybe helpful. Good Luck
  3. Ravenwood Landscaping

    Ravenwood Landscaping LawnSite Member
    Posts: 117

    My clause states that a customer can cancel anytime, but they have to pay me for any materials and time spent working on the job. And that the cancellation must be done in writing, for my files. I personally don't have any need for someone to call me 30 days ahead of time, I can just stop going.

    I also don't have a penalty fee. Penalty fees for early cancellation are BS as far as I'm concerned. It doesn't cost me $50 to stop going to their house. Maybe someone can key me in as to why as penalty fee is needed? Maybe I just haven't thought of the right reason.
  4. fertguy2008

    fertguy2008 LawnSite Member
    Posts: 82

    The idiot I first worked for had a 2 month cancellation fee. I can't believe his customers used to sign the dotted line.
    When they cancelled, his dumb butt would go even further and sew them for the penalty fee after they did not pay it. DUHHH!
    Countless hours spent in court for no good reason. The judges quickly knew him by name.
    No need for a penalty.
  5. Lane65

    Lane65 LawnSite Member
    from Florida
    Posts: 8

    Thanks fetguy08, My goal is to devise an effective way to discourage those clients who want to discontinue service right after the high growing season. Are people in the Southeast developing a standard method in addressing this concern? If there's a growing industry standard? I'd like to follow.
  6. fertguy2008

    fertguy2008 LawnSite Member
    Posts: 82

    The serious businesses have turned to the philosophy of, "No contract/agreement no work". That still does not keep the throat slashers out of the mix. You'll always have the lowballers. Be firm about this philosophy, the kind of people you want to work for will begin to find you.
    Its the only way to ensure your success and ability to make it through the off season. I wish you well Lane65.
  7. grass-scapes

    grass-scapes LawnSite Bronze Member
    Posts: 1,552

    If you offer a client a flat rate plan for FULL service, then in order to keep the pricing structure lower, you offer them a 12 month auto renewing AGREEMENT. You take all services, add, and divide by 12. (Im sure you already know that part)

    Well, the problem arises when you have a customer who KNOWING that they get a significant discount but have to pay in the winter signs up at the beginning of April. Lets say April 1 for arguements sake. Ok....You do the pre-m, the ferts, the mowing all season. the aeration, seeding, and leaf cleanup. Mid november you are done. Now, lets say you had a nice growing season....Here, that is 40 cuts. Your typical cut is 40 dollars. They owe you 1600 for the mowing. Add in aeration (150) Seeding (200), leaf cleanup (250) fert times 6 (330). Grand total for season 2530. Broken down over 12 months is about 210 a month. they paid you for April thru November (8 monthly payments). Thats $1680 but you did $2530 worth of work. They cancel at end of November. How do you get your $850? My cancellation clause is 3 times the monthly payment or actual charges for services completed to that point, whichever is GREATER. In this case, the services completed would come into play due to 3 times 210 does not equal what they still owe.

    Now, if they cancel 2 months before end of contract, no judge is going to let you collect 3 but you should still be able to collect what they still owe. You will get some that will try that trick, but put a procedure in place and stick to it. DO NOT sign up a renter to that type....Prepay only per service. If you sign up a homeowner, get the signatures of whoever owns the house. Trust me, Ive been through it. Not the man, not the woman only....the owners!
    Initial the contract in those places where it may cause problems. Signature of all parties.

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