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Wrongfully lost a contract

Discussion in 'Business Operations' started by TYTILIDIE, Apr 18, 2012.


    TYTILIDIE LawnSite Member
    Messages: 78

    I have a nation wide client that I have been dealing with for the last five years or so. Since day 1, they have had my blood pressure up and down in a moments notice. They go to bid every and take take take. Last year they took 4 months to pay us for our maintenance. I really don't make much off of the mowing/maintenance but the snow removal is phenomenal. I paid off 60% of my debt on the snow alone this winter. I have always wanted to replace them but wanted to wait until I pay my debts off, if I last that long that is.

    I resigned with them in Oct 2011 for April - October 2012. So the other day I notice sprinklers on, last Friday to be exact. I was told not to turn anything on until after the 15th. So I go in the store and ask who turned them on when the manager asked me, didn't you get the termination letter? I said uh...no?! So I go back to the office and call the Facilities manager and ask him what is going on. Apparently, this rather large "Pharmacy" store is going through major changes. He tells they have hired an outside management company to deal with the vendor side of the business.

    So he goes on to tell me that they did not perform correctly and went and hired another company to maintain the stores. This company they hired is a fly by night deal and everyone in this town knows it. They are a joke. So, he goes on to say that he is trying to get it all cleared up and at least try to get it to where we can finish out the year (which would be nice so I could have some time to try and replace them) and hopefully resign in Oct again. We received absolutely no notice. We have done most of our spring start up work for April so we have to bill for it. The Facilities manager told to continue work, we went to turn systems on yesterday and the store manager said no because they need word from Corporate that we are to work there.

    What the hell should I do? If I lose this contract right now, I will have to let my employee go which I really don't want to do since he is VERY good and was VERY hard to find. I am waiting on the facilities manager now but haven't been able to get a hold him.

    Any thoughts?
  2. AlohaMowing

    AlohaMowing LawnSite Member
    Messages: 58

    As I understand it, you have a contract with the company that runs through October 2012. You have performed all your obligations under the contract, but now are being told that you may not continue the job. You do not say what the contract says regarding termination of the contract, so I assume neither side may terminate it prior to its expiration except for cause.

    I would send a letter to the management company reiterating the terms of the contract, inform them that you are being prevented from doing the job which is a breach on the part of the company, and that you will consult an attorney unless, within 5 days, you receive from the management company confirmation that the contract remains in force. And schedule an appointment with an attorney for what would be the 7th day after you deliver your letter (so you can cancel at least a day in advance if, by some chance, the management company responds). Limit what you say to the company to that which is essential because, in the event of litigation, anything you say may be used against you, and you want any litigation to be resolved based on the terms of the written contract as much as possible rather than what might be said.
  3. easy-lift guy

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

    Very sound advise from AlohaMowing. The problem with management companies taking over day to day operations for larger companies is as a general rule they know nothing about existing agreements or don't care. My distributor told me several years ago that management companies have pretty much destroyed the Golf course industry in Texas from a vendors point of view and I continue to see this across the board in other industries as well. For the sake of saving money for their clients is in actuality the furthest thing from the truth. The emotional capital you have spent on this account is not worth getting out of debt only to end up in the hospital or worse. Salvage what you can and add a provision to your existing contracts that hence forth any change in management from your customers standpoint must be made 30 days in advance.
    That will buy you some time to fall back and regroup.
    easy-lift guy

    TYTILIDIE LawnSite Member
    Messages: 78

    Here is what the old contract says:

    8. Liability for Breach of Contract. Any failure of either Party to perform any of the terms hereunder shall be deemed as breach of contract. The breaching Party shall correct the breach within thirty days from the date of receipt a written notice from the non-breaching Party specifying such breach. If the breaching Party fails to correct such breach within such thirty-day period, the non-breaching Party may select to terminate the Agreement upon written notice to the other Party, in which case the breaching Party shall compensate the non-breaching Party for all economic losses sustained by the non-breaching Party as the result of such breach.

    And the new one:

    9. Termination. In the event that the Owner(s) wish to terminate this contract, the Owner(s) must first send a certified letter of intent to terminate after and only after, all consultations and or negotiations with the Contractor have failed. This certified letter must include a thirty day (30 day) notice of intent to terminate and must also include a reason for termination. This contract may only be terminated when the certified letter is received and at the end of the thirty(30) day notice, on the final day, a check for any fees to date plus eighty percent (80%) of the remaining fees of the left over contract term.

    The new contract still has the exact clause as the previous in addition.
  5. GrassIsGreenerLawnCare

    GrassIsGreenerLawnCare LawnSite Senior Member
    from VA
    Messages: 636

    Man, Thats BS. Sorry to hear this. What i dont understand is why they wont allow you to continue normal maintenance, but are having another company on the grounds doing your work?? They didnt contact you before any of this?

    I would certainly contact an attorney and be prepared to take action for breach of contract. Your termination policy is clearly stated, and there is no reason why you are not allowed to continue your work for AT LEAST the next 30 days.
    It sucks because the are going to play the old "We're going to have to get clearance from corporate", and you arent going to get anywhere. I would demand to speak with the person in charge or at least try to set up a meeting to go over your contract with them. If you have an attorney with you....or even call....Im sure that will light a fire under there butts
  6. easy-lift guy

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

    I believe what you have prepared is good. Schedule an appointment with your attorney or one that has a strong knowledge of contract law and proceed from there. Management companies need to understand that they can loose their market share just as fast as vendors can. Keep us posted.
    All the best
    easy-lift guy

    TYTILIDIE LawnSite Member
    Messages: 78

    Looks like the company is saying we are supposed to keep working and that it is final. Problem is, no one has told the local managers. I hope this doesn't delay getting paid.

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