What's The Point of A Contract When...?

mcw615

LawnSite Senior Member
Location
Virginia
A customer 'can no longer afford to pay for your services'.

The majority of our lawn and landscape maintenance contracts are all-inclusive, on a 12-month basis with 12 equal payments.

In the past, if a customer needed to cancel a contract [moving out of state, job loss, or just wants to cancel the contract] I would sum up all the services rendered to date, all payments received would become a credit to the invoice, then you have a balance due which is usually 1.5 or more times the monthly price. I never tried to fight them because I thought of it as bad business.

Now, to me A) the point B) the benefits C) the risks of a contract goes both ways...you're signing the dotted line. In your benefit = you're getting a better price by bundling all the services, you're getting a 12 month easy pay option. In my benefit = I am getting X amount of work to be performed over X period of time. Your risk = being stuck in the contract. My risk = unforseen price increases that I would have to eat...gas prices, miscalculating mulch costs, performing 9.5 months of work for your twelve month easy payment and many more.

But why is it the contractors fault that you can no longer meet your end of the deal?

I don't know if I should start saying a contract is a contract or continue to allow customers break their end of the deal?

I mean, shouldn't a customer be liable to stick to their end of the deal when they hit unforseen circumstances just as I cannot raise the contract amount in the middle of the contract because of my unforseen circumstances?

Not sure if I should start being a bad guy which is bad for business or continue on...
 
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jsslawncare

LawnSite Bronze Member
Location
North Georgia
Your first sentence says it all. And, I can't afford to take them to court just to have the them ordered to pay me and them still not pay. Sometimes a good ol' hand shake is great.
 
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mcw615

LawnSite Senior Member
Location
Virginia
Your first sentence says it all. And, I can't afford to take them to court just to have the them ordered to pay me and them still not pay. Sometimes a good ol' hand shake is great.
Well, it only ever happens at the end of the season..when you're not doing much of any regular weekly work, some customers forget it's a contract and think it's like a cell phone, you pay whether you use[get] the service or not. Never does it come across as a dire situation to cancel.
 

grass-scapes

LawnSite Bronze Member
Location
Greensboro NC
Always the risk of not getting paid.

Think of it this way. If you wanted out of your cell phone contract and refused to pay for any more months of service and refused to pay for any early termination charge, what would happen? Well, you wouldn't get to use your provider any more (until you paid the fees), and you would probably get a black mark on your credit. Verizon isn't going to send someone to your house to take your money. They can't FORCE you to pay. You could probably get another provider, or a pay as you go cell phone.

Business is a risk everywhere you turn. Ive had customers quit a contract and never pay...Ive had others who finished out the contract, and still others who paid the cancellation charge. There are absolutely NO guarantees in anything. If you go out of business tomorrow, do you think all of your customers will sue you for not completing your contract?
 

weeze

LawnSite Fanatic
i don't do contracts. i do the work i get paid. if they stop paying i stop working. if i go out of business then they find someone else. it takes all of the legal crap out of it. no reason to go to court over cutting someone's lawn.
 

tyler_mott85

LawnSite Senior Member
Location
Wichita, KS
Is it possible for a small business/LCO to put a deliquent contract/account against a clients credit? Any time I've had a deliquent account the business used a collection company and they were able to affect my credit. Is the cost to have a debt collection company prohibitive?
 

weeze

LawnSite Fanatic
you can get out of any contract at any time. even though you sign a 2 year cell phone contract you can get out of it. they just stop giving you service and they charge a fee. i imagine what you have to go through to make one of your customers pay the fee wouldn't be worth the trouble. people have said put a lein on their property and such. i guess it would be worth it if you were doing a job for them and they owed you thousands of dollars. if they just owe you $500 or less i don't see any point of trying to fight it.
 

DEPENDABLE LANDSCAPING

LawnSite Bronze Member
Location
dennis ma.
We don't use contracts...... But I do all handshake deals. I would expect my clients to uphold their end of the regardless a deal is a deal. Pay your debts even if it is at a slower rate. Show me you care and make the effort! Hang in there and good luck.
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mcw615

LawnSite Senior Member
Location
Virginia
I am not sure how many employees any of you have and the amount of overhead. The benefits of switching to all contracts versus 'pay as you go' benefited greatly.

The problem we were previously having by the 'pay as you go' were: 15% of customers tend to suspend services for a a few weeks in the summer. 25% cancel service after Halloween, when there still is work to be done bi-weekly for the next six weeks. The BIGGEST reason why we found 'pay as you go' as the MOST RIDICULOUS HEADACHE was the other services: mulching, pruning, seasonal color, aeration and seeding, etc.

We tried to set rules of when you had to contact us by/before and when we were performing such services. It helped, but still failed.

I will add contracts in general add much less burden on our end, ease of scheduling, less paperwork/invoicing and many other reasons. With employees and many other factors, contracts were the only way to solve the issue...and frankly it has worked out great and we have grown from the switch. This forum was not for the reasons of why using contracts or not, we all have our reasoning and preferences and what works BEST for the each of us. Some things surely work out better for some than others.

Handshakes...that was the first three years in business. Ever file a civil suit on a delinquent account - judge favors them. "I called and left you a voicemail to cancel after July 01, I'm sorry you mowed the rest of the year." Judge told me everytime, verbal agreements are nothing to on paper. It's your word versus theirs. Your customer is innocent until proven guilty.

I guess my approach should be meet in the middle...I'm not going to force the contract upon you, but I'm not going to let you walk away free and clear when summing the services there is a balance due, explain that as I previously have to clients...some decide "wow, my monthly contract is $225/month and my balance due would be $700, guess just continue service then."

Though the one thing I do fear is this....as many of you know, your clientele is likely at least 50% or greater comprised of retired and elderly clients. Many of them single, if you have a contract and they pass in December...no more social security and pension checks, you're out of three months of payments for work you have already done....guess that's a question I need to ask my lawyer the next time I see him. I'm sure you can file a lien on the property or estate sale or however if their family decides to be an ass, but then again...some things aren't worth it after the time and money you have to put in.
 

unkownfl

LawnSite Platinum Member
I just get what I can and haul ass. If they can't afford the whole month I'll take whatever. But none of my contracts are more than like 100 bucks a month.
 

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