Discussion in 'Business Operations' started by FIREMAN, Apr 25, 2001.


    FIREMAN LawnSite Senior Member
    from n.j.
    Messages: 318

    I am concerned with the need for contracts on residential and commercial deign/build projects. Where should I seek advice on the proper wording and content to make contracts binding? Also when signing a new job how do you generally outline payments? I have been generally using this, 1/3 before any materials are ordered/purchased,1/3 half way through and 1/3 on completion, sometimes if a project is materials heavy, I specify more up front. I ask this after being burned for about 10,000 dollars last season on one job and having to pay an attorney to tell me the contract I had my client sign was not binding....
  2. BRL

    BRL LawnSite Bronze Member
    Messages: 1,211

    I think you answered your question in your own post. Talk to an attorney, preferably one that knows or specializes in contracts. You have already learned the hard way that it is worth paying a lawyer whatever they might charge to have a legally binding contract. I used to do they 3 payments thing until I realized that since I wasn't doing major projects, it wasn't worth the hassle of splitting the jobs into 3 payments. Since then I've been doing 1\2 up front and 1\2 when completed. If I do larger (for me $10,000.00 or so), or longer time for installation type of project then I'd probably break the payments into thirds.
  3. Stonehenge

    Stonehenge LawnSite Bronze Member
    from Midwest
    Messages: 1,276

    Ditto on the attorney answer.

    As for billing practices, I used to do 50-50. But some projects were only a day, so I'd just invoice the full amount when done. I never had a problem with payment, but the lag in receivables hurt. So last year I changed to:

    20% at time of contract signing, to reserve place in schedule. I won't reserve schedule space without signed paperwork and money.

    50% the day we begin.

    30% invoiced after end of project, net 15 days.

    This way, you already have all your costs and maybe more covered before your shovel even hits the dirt. I can't even explain how much of a burden this took off of me last year. I never had one anxious moment, all season long. Now, for a 1/2 day project, we'll take the 20%, and just bill the remaining 80%. By the time they bothered to get out the checkbook for the 50%, we'd be done anyway.

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