Why A Good Contract Is So Important

Our deck was original to the house and we’ve given it some TLC since we moved in.  This summer, however, the stairs started to rot and finally one gave way.  We contacted the contractor that had done some of the previous repairs on the deck for a quote to replace them.  How little did we know that the contractor had gone off the deep end and was setting everyone up for bad feelings and way too much stress.

When Total Bid does not mean Total Bid
The contractor came to the house the same day I called, and then gave us a bid in writing the next day.  I’ll skip the details, but here are the lines in question:

Total Bid:                        $x
To be paid at signing of contract:    $y
To be paid after completion of work:    $z = x-y

Total bid of $x, right?  Seems simple enough.  We added a power wash and some staining into the contract and that pushed the total up to $x + $600.  Well, we really screwed up and we wrote a check out for $x which the contractor promptly cashed the same day (Friday).

By Monday, we had a pile of stained lumber in our garage and the contractor was asking for another $500 to “make payroll”.  We promptly told him no, we’ve already paid more than we should have.  And that’s where it stood for a week as the contractor refused to return phone calls and emails.

When he finally met, he informed us that the total was $x + y + z and that we were trying to screw him out of the money he’d already put into the job.  So in his reality Total Bid was, at best, misleading and at worst, fraudulent (in my opinion).  I asked if he was willing to go to arbitration for the amount and he refused.  He was offended that we thought he was a liar and left in a huff.

Keep in mind, we’ve written software that does invoices and have been dealing with multi-million dollar projects for a large chuck of our careers!  I can’t imagine ever writing an invoice that was so bad that it confuses the client.

The Saga Continues
After thinking about it, we said the original bid was a little light so agreed to pay more.  He said great, but his ‘lawyer’ told him not to do any work without payment in-full for fear of us canceling a check before it was paid.  Never threaten geeks because we asked for the lawyers phone number and promptly did the reverse look-up to find out that the lawyer is a bankruptcy lawyer.

We paid the amount in full and he refuses to do the work until the check clears.  I have some serious doubts as to if he ever shows up again….

I’ve checked with the local Better Business Bureau (BBB).  He’s had 3 complaints in the past 24 months.  None of which were resolved.

The Lessons For Me as the Consumer
•    Check the BBB before deciding on a contractor.  It used to be you had to call their office and now it’s all online.  It’s not very hard to do and you should just do it.
•    Get multiple bids regardless of past experience with the contractor.  With a second or third bid I could have called his bluff when he said it was more money, or it could have proved to me, upfront, that his bid was too low and I would have flagged it

The Lessons for Me as a Contractor
Wow, where do I begin on this one.  My contracts are already much better than this guy’s half-pager.  Of course, in reality we’re talking about much bigger sums of money and longer periods of time, but that really doesn’t mean a thing.  A contract is the first place your customer is going to turn to in case of a dispute.  Other lessons:
•    Clearly define what work is to be done in as much detail as possible
•    List any assumptions and limitations before starting the work
•    Clearly define what the payment schedule is
•    Define how disputes are to be handled
•    Be as professional as possible and don’t let emotions get the best of me
•    Have a standard contract format you can use for everything
•    Oh, and don’t use “TOTAL BID” for anything other than the total.  🙂

I’m sure there are more lessons to be found in this story and I’ll be curious to hear your reaction to it as well.  As a contractor thankfully I have very few horror stories with clients having issues with work.  The one case that I can think of, the client has unrealistic expectations of what we (as software contractors) would do for them.  They expected us to do their end-user tech support since they had no one in-house to do it!

Their requirements document was a mere two paragraphs long with most of it being bullet points.  In their emails that kept using the term ‘easy’ when describing the project.  Needless to say, those two items are now ‘red flag’ items.