International Door & Operator Industry

SEP-OCT 2018

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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V O L U M E 5 1 I S S U E 5 O C T O B E R 2 0 1 8 15 Continued from page 12 2. Know the Chain: At a minimum, you need to know with whom you are contracted. But for purposes of collection, it is very helpful if you can get it established in your contract who your customer is contracted with, and how your chain of contract relates to the owner of the real property. Are you contracted with a lessee? If so, you may not have as much (or any) lien right as you otherwise might. Did you contract with a developer who doesn't actually own the property at all? That could lead to being contractually tied to a shell company that has no funding by the end of the job. Knowing who you are linked to could be the difference between having a remedy, and having nothing but a piece of paper to collect from. 3. State the scope: A good rule of thumb for a contractor – and particularly for IDA members – always specify what you're expected to do in the contract. This means identifying products that have been purchased and the services that are to be performed. The more detail you can provide as to the description of the scope, the less likely there is to be confusion later about what you should have done and what you weren't required to do. It also helps avoid unwarranted customer claims of things that weren't wanted. 4. Time and date: "Time is of the essence" is a familiar contract phrase, and it means the parties involved are expected to perform in a timely fashion. In some construction projects, time is stated with great specificity, often including a number of days to achieve completion, and perhaps even includes liquidated damages for late performance. As the contractor, rather than the owner, you may want to be less restricted on time rather than more, and you probably want to avoid liquidated damages or other consequential damages for not completing work in a set time-frame. That said, if there is a time limit, you are better protected if your contract states clearly when you are expected to start performing, how long you have to finish the work and what (if any) consequences there may be to finishing either earlier or later than expected. 5. The Price is Right: This might be the most important contract term of all for your business. After all, you are in business to make money and the term of the contract that identifies what you are going to be paid is therefore of particular importance to you. For this reason, it is incumbent you specify not only what you are charging for your work, but also how you expect to be paid. Is it a lump-sum job or a unit price? Are you to be paid by the hour or by the task? Put it in writing so there are no questions. 6. When the Money Flows : The timing for payments is perhaps as important as the amount, so this should be made explicit too. Because of the high cost for materials, such as the garage door and operator, you may expect the customer to pay a deposit or pay for those materials up front. If the job is going to be extensive, there may be a need for percentage or progress payments. For some projects, particularly commercial, the owner may expect to withhold retainage and/or punch list costs until the end of the job. Remember that if your contract specifies when the money is supposed to flow, then you improve the likelihood that you get paid on time. Additionally, since the default is only that you will be paid in a "reasonable" time-frame, the terms in your contract setting exact timing can give you the right to stop work until you get paid again. 7. Warrantying your Work: Customers expect IDA members to stand behind their work. However, you aren't expected to – and shouldn't – permanently guarantee that a product you install or fix will work perfectly until the end of time. If you include a limited warranty in your contract, that states exactly what you are warranting and for how long, then you can also disclaim all other warranties. Check these regularly and especially if you find that you are spending more time Warranty Customers expect IDA members to stand behind their work. However, you aren't expected to – and shouldn't – permanently guarantee a product you install or fix will work perfectly until the end of time. If you include a limited warranty in your contract, tat states exactly what you are warranting and for how long, then you can also disclaim all other warranties. LEGAL&LEGISLATION V O L U M E 5 1 I S S U E 5 O C T O B E R 2 0 1 8 15 Continued on page 16

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