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A large yearly contract, payments are short. where do you draw the line?

Discussion in 'Lawn Mowing' started by Chop Stuff Up, Mar 14, 2008.

  1. Chop Stuff Up

    Chop Stuff Up LawnSite Senior Member
    Messages: 457

    Just wondering where you draw the line. Lets say you are 1, 2, or even 3 years into your business. I spent 4 years in lawn care (not counting the childhood push mower days) and have since switched to transportation, but this can apply to any type of contract work really. Lets say you have one major contract, in my case $40,015 a year. This is your largest contract, and you can hardly support yourself if you lose this contract unless you win a bid with another company. This company sends you a weekly check, and as per the contract, it should be $745. You do an extra job for this company and agree on $315, thus making your check $1,060 for that week. Now this was 6 weeks ago. The week the check should have been $1,060, they write you $755. Next week $615, then $605, then $718, another $605 and today we're looking at $616.86. Mind you it should be $745 a week not counting extra work. I confronted the supervisor of the company 2 weeks ago after several ignored phone calls and he claims I was dishonest with the amount of work I was doing (a complete lie) and he will not pay what is written in the contract. This contract has been in effect for over a year. My reply was... the contract entails everything, and was signed and agreed upon. Now how would you handle this and where do you draw the line? Suck it up until you win another bid? Drop it and take a big financial hit?
  2. Carolina Cuts

    Carolina Cuts LawnSite Bronze Member
    Messages: 1,152


    Was the contract, overall, pretty basic? Cut, trim, edge and blow, X amount of times a year = $745/week??? Anything over and above the contract is 'extra'?

    Sounds like a clear cut case of 'cheapness' and a 'pita' customer.

    Dudes gotta honor the signed contract... and NOT pay ya only what "HE" can afford that week.

    It is "HIS" job as a property manager to come to you if and when HE isn't happy with the quality of your work. Especially early on. This way, the problems can be fixed.

    For him to 'pay you what HE thinks you're worth that week' is ridiculous.

    I have 3 commercial contracts... 12 checks a year per contract, that's 12 invoices per contract per year. All invoices are the same each month $$$.
    Now if I perform anything over and above my contract... ie. trees, extra extra mulch, irrigation, extra flowers... then I ADD an invoice seperately for that particular month the work was performed.

    Personally, I would cease ALL work being performed until the balance is paid up... remember, you still have a contract... and he's NOT gonna wanna end up in court, especially if you have been upholding you're end of the contract.
  3. Bunton Guy

    Bunton Guy LawnSite Bronze Member
    Messages: 1,917

    What is up with the weekly payments? why not monthly like most?

    Sounds like you added something to the agreement "verbally" outside of the contract to make the price go from 745 to 1060? or did you re-write the contract
  4. MarcSmith

    MarcSmith LawnSite Fanatic
    Messages: 7,157

    I hate cheapies...

    if you are doing the normal contract work to the specs outlined in the contract. I would send a polite, but firm letter with a copy of the contract highlighting the weekly payments. Reminding the client of their financial obligations. I would also send a statement showing the past due amount just based on being shorted in the contract. The "extras" was there a verbal or written agreement? Usually on change orders I got a signed ticket or proposal. since most commercial places need that to authorize excess payment above and beyond the contract prices. I would add that invoice as well and remind them that this still has not been paid, but the work has been completed.

    if you contract allows for late charges....you need to remind the cline that late charges apply to when the balance is not paid in full. so even a partial payment gets assessed the full late charge.

    I would give the client a 30 day notice that if the balance and late charges are not paid in full at the end of the 30 days, you will take other measures to collect the outstanding debt. And that at this point in time that he is in default of the contract and as such you will no longer provide services until a ZERO balance is achieved unless there is a negotiated payment plan in place.
    I know it tough to turn your back on 40K, but, the client is stealing from you....

    I would also leave the option open to renegotiate the contract...(it sound like you need the money) for a lesser weekly amount. But The only reason I'd renegotiate is if I was guaranteed full payment on all the invoices Ive been shorted.

    The Client really has you by the short curly hairs...since you are in the financial shape you are in....you need him and you need the money..and 80% of 700 in your pocket is better than 0% of 700...

    Are you willing to work for less...would you accept a renegotiated contract???

    After the first one or 2 shorted checks is when you should have been asking these questions.

    Also any paper work you send, send it send it Fed EX or UPS so they have to sign for it and you can print out the record of it being signed for. I like UPS and fed ex better than UPS since most people will see the green return receipt thing and they then kick it back to the postman. most folks don't think twice about signing for a fed ex or UPS package.

    you could get a judgment in Small Claims, but you could possible also get damages,lost wages, ect if you got a real good lawyer, but thats cost $$ up front.....

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