The Value of a Written Service Agreement

Discussion in 'Business Operations' started by xpnd, Feb 21, 2003.

  1. xpnd

    xpnd LawnSite Senior Member
    Messages: 378

    As far as default customers go, 2002 was my worse year. Previous to this year the mere threat of filing a lein or a complaint in small claims court was sufficient motivation for the deadbeats to pay up what was owed. In small claims court today, I walked out of the courtroom with a judge's order that the deadbeat will pay me the $540.41 cents owed plus $67.00 in filing fees. This is no guarantee I will get paid, but you can believe that if I haven't received a check by the tenth calendar day, on the morning of the 11th I will be filing an Abstract of Judgement collecting 10% on this property. That house won't be sold until I get paid. This service agreement was something I wrote up myself. We do this, you pay that. I love it when a plan comes together.
  2. GraZZmaZter

    GraZZmaZter LawnSite Senior Member
    Messages: 740

    There is something to be said for preperation.
  3. JVS

    JVS LawnSite Member
    Messages: 132

    Our snow plowing contracts clearly have our pricing structure defined- especially for storms over 12".
    I have had our billing dept send out the 1/17-1/18 invoices-
    We are now starting to get a slew of angry clients upset about their bill-

    Any suggestions on how to handle the calls and call backs- We have a few ideas- but I'd like to see how others would also handle this. Concerned not to lose clients-All help is appreciated and thanked!

  4. xpnd
    was it a default judgment? I have never had anyone show up to defend themselves.

    1st thing is to call back ASAP. The longer they think about it the madder they are going to get.
    When you call and they say" why the ---- are you charging me XX"
    I apologize for the misunderstanding Mr. Customer, do you have a copy of our agreement handy and we will go over it.
    No? Well i have mine handy here let me go over the storm pricing on your contract.
    Read it to the and ask if the need another copy sent to them.
    The disarms most of these situations, but some are going to stay mad regardless.
    People sign contracts but don't read them, forget the terms or are just mad that they have to spend the extra $.

    An idea for next years contracts, have a place for them to initial that they are aware of storm pricing.
  5. JVS

    JVS LawnSite Member
    Messages: 132

    Good points- Actually I think many clients forgot- because above the pricing is a sign off for declining or accetping liability on de-icing - so it's not like I am hiding fees or inflating charges.
  6. GraZZmaZter

    GraZZmaZter LawnSite Senior Member
    Messages: 740


    You need to point out to your client that your billing terms are clearly stated in the service agreement. If this does not correct the problem, you may have to meet with them personally with a copy of the agreement. Good luck!
  7. xpnd

    xpnd LawnSite Senior Member
    Messages: 378

    Nope, the customer showed up. I run a service agreement with 12 monthly pro rated payments. If you cancel before the 12th payment, there is no penalty however we do reconcile the bill for the amount of work done versus payment received. A positive balance is refunded to the customer, a negative must be paid to me. The customer's only defense was, "I cancelled the agreement, wrote final payment on the check and I don't think I should have to pay him anymore money." After each of us had our say the judge basically flipped between us three times asking questions for more info. The last time he asked me how I ran the numbers. I told him and he said that is what I am coming up with also. He then turned to the customer and said " You have one more opportunity to explain to the court why you think you don't owe this man the money. All the customer said was, " I just don't think I should have to pay him any more money......By that time I was almost ROFL
  8. JVS

    JVS LawnSite Member
    Messages: 132

    Thanks - we are going to contact each client whom called and politely refer them to the contract- We are also going to give them the option of full payment with credit card or 2 installments
  9. CCLS

    CCLS LawnSite Member
    from Iowa
    Messages: 22

    I had court over a dead beat about a month ago. I tried to collect on this account for over 6 months an I was just ignored. About the first part of last December, I went to her house and to my amazement she was home. She opened the door and gave me this line about how she didn't have any money. Then she said she would call the bank and see what she could do. This idiot pulled out her bank card, which listed the bank she banked at. After calling the bank, she told me she would have the money if I came back the next day. So I told her fine I would come back, but if I didn't have the payment then I would take her to court over it.

    I came back the next day and just as I got to her door step, I saw her running towards her car. I walked over to the car and asked her if she had my money. She wouldn't answer me, but instead tried to run me over with her car. I was so t-d off that I went down to the court house that same day and filed papers.

    After I won in court I waited for her to make payments. She made the first two and then quit paying. So now, since I know where she banks, I will have the court go after her bank account. I will do what xpnd stated if she doesn't have money in her bank account. If nothing else, I will go after her car. If she owns the car, then the court will send her a letter demanding that she send in the title of the car until her court debt is paid. The only catch is that the court does not enforce their demand. If she ignores the court and does not send in her title, then there is nothing that I can do about it.
  10. dannyc33

    dannyc33 LawnSite Member
    from indy
    Messages: 95

    Just some food for though. I had a guy who owed me $28. I won't go into details, but he was an a-hole
    Anyway one night I went over to his home, smash in the bcak of his Mustang, sprayed an extinguisher all over the inside of his truck,broke in to his garage and "stole" an extension ladder, 2 step ladders, some dishes, some toys, and some other things to recoup by loses. I also found a wedding dress, but didn't have it in be to take that, but I left him a "nice" message on the bag and on his walls. All over $28....

    again, just some food for though

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