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New customer cancels 12-month contract after one month?

Discussion in 'Business Operations' started by shop's lawn, May 3, 2012.

  1. shop's lawn

    shop's lawn LawnSite Member
    Messages: 72

    I wanted to see what you guys thought on this issue.

    I signed up a new customer this year as of March 28th,2012 for a 12-month contract on a total of 3 properties for $1140.00 per month plus applicable sales taxes. Contract states from April 1st.2012 ending March 31st,2013 and if both parites agree can be extended with a increase not to exceed 10% each year.

    We started the spring clean-ups and trimmed bushes at the three job sites. One job site we couldnt totally trim all the bushes- had to leave 4 of them due to bird nesting eggs. I talked with one of the 3 business partners about it and told him I would trim them the bird was done with its course. Perfect no complaints were e-mailed or called. Since this year has kicked off early for us with no snow and warm weather we had mowed two of the properties twice after the spring clean-ups were done each week later. Never any complaints or calls on issues/concerns. Customer called to add one more small property onto the contract last week, it was never touched this season so far so we did spring clean-up,dethatch and hauled away the debris. There was one mulch bed in the center of round-about driveway that was stacked with leafs about a 1-2 feet tall to cover plants for the winter. I would say we got 80% of them out of the bed but the bottom leafs were so wet and packed and we were removing alot of mulch raking and blowing so we stopped and I would let them dry out til next week service on the next thursday service which would have been today. Never got a call with complaint but I should have called them to let them know but it just flew over my mind and forgot about telling we would get the rest of leaves next service. This property brough bill upto 1300.00 something per month so a good amount and nice accounts. I did turn down three jobs so I could take on these accounts for the year, we added another zero turn mower and new skid sprayer to help with new accounts this year.
    Yesterday they called to cancel due to not being happy with the one clean-up and dandiolions in one yard, Fertilize was put down granular but this week was spray week so I never got a chance to spray the first round or heard any complaints until yesterday. They want to pay 600.00 for april which contract states 1300.00/change.

    How would you guys handle this issue?

    I look at it was 15,600.00 for the year so a good slash in budget. I'm small with one crew of three guys. Sorry long thread but wanted to give you the details of it.
  2. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,192

    Ive never understood all that contract mess.

    I think all you can do is sue them in small claims court for the 700$ defecidet.
  3. Dr.NewEarth

    Dr.NewEarth LawnSite Bronze Member
    Messages: 1,476

    Does the contract have a 30 day opt out clause? I wonder if they found some-one cheaper?

    Put a lien on the property or go to small claims court, but don't wait. There are time limits on filing liens. I think this is all you can do.

    Unfortunately where I am, we can't recoup the fees for the court or lien.

    This isn't the type of crap you want happening to your business at the beginning of the season when you are scrambling to pay bills before the revenue starts coming in.
  4. shop's lawn

    shop's lawn LawnSite Member
    Messages: 72

    There is a 30 day notice must be sent only with cause which they are saying not happy with work but I never heard any complaints or given the chance to correct issue and I did get a e-mail later last night after we talked on the phone.

    Yea I should have called them to atleast mention about the leafs and plan was to let them dry out since we have had rain each night or everyother day and but it just blew over my head and forgot about it. I never got a call or complaint until now they want to cancel and now list two complaints.
    He did mention on the phone they have a rider mower and there maintenance guy that they pay 10.00 per hour would cut the warehouse building- I'm thinking maint. guy is going to cut all of them to save them quite abit of money.
  5. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,192

    Thats kind of my point, no one really takes those contracts seriously.

    For me Im staying solo and have all individual homes, so if I loose a customer Im not suffering too much.
  6. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    Sounds like they got you to do a significant cleanup to make it easier on their maintenance guy.

    Bill them for the cleanups and all the other work you did at your normal rate if it comes out to more than what they are offering. Otherwise, if you have a signed contract, think about a lien and court.

    I ALWAYS take before pictures when I start a new contract. That way, if there is an improvement, they can't say you breached....

    When they cancel, I take after pictures too.
  7. easy-lift guy

    easy-lift guy LawnSite Gold Member
    Messages: 3,372

    Sound advise, they used your services and got what they needed. They did provide you with cause by stating they were not happy with the service. Tell them that you will not pro-rate the fees for the month and you require payment in full in order to close theiir account. If they still refuse to pay in full
    See them in court for the full amount owed plus court cost and your time.
    easy-lift guy
  8. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    One thing that I have found over the years is that a customer will tell you that he isn't happy with your service no matter if there was never an issue and he always commented to you about how wonderful the lawn is if he thinks that it will get him out of a contract with no repercussions.

    Think about it, if you want to change to another cell phone company, what do you tell your current provider when they give you the bill for the early termination charge? Hey, My service kept dropping and I got horrible coverage. Same thing with a lawn contract.

    I actually had one customer who decided to get the local neighborhood kid to mow for 10 bucks and told me he couldn't afford me any longer and he was going with the kid. I reminded him of the contract in place, and immediately, my work became "sub-par" Common tactic.

    In my newest contracts, there is a clause that any complaints should be addressed via email or writing with sufficient time to correct any issues. Any cancellations should be in writing, with a cause or reason for cancellation. That way, if they are trying to save money, but later tell you its for bad service, you have their original reason in writing.

    Will it help you in court? Who knows. Is it ever worth going to court over? Most times I say no but the option is always there.
  9. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,188

    Sounds like a great learning opportunity for you and your employees. Walk away and learn how to communicate better. There are a hundred guys waiting in the wings to do the same job for the same money or less - what differentiates your company? Every time we lose a job we take a look in the mirror and ask what could we have done better, how could we of provided more value.

    300 businesses were surveyed and asked to rate their customer service - 80% ranked themselves superior. They then surveyed 3000 of their customers - 8% said the customer service was superior. 72% disconnect on what people expect and what they are getting.
  10. Nj shade

    Nj shade LawnSite Senior Member
    from Nj
    Messages: 284

    Any contract cancels must be in writing, certified mail, return receipt so everyone has a paper trail. Cancels of contracts are part of the business Unfortunatly. I'm working on getting one that HOA wants to cxl with Brickman, do happens to everyone.

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