What to Include in Your Contract
PART 9
NOTE: Any industrial painting project is a major undertaking with plenty of moving parts. We aren’t lawyers, and nothing you read here should be construed as legal advice. Direct all legal questions to qualified counsel experienced in commercial law.
Do You Need Your Own Contract For Industrial Painting?
The majority of industrial painting contractors will have a boilerplate agreement you can choose to sign to get work underway.
This covers all the services the contractor in question typically provides and includes a few minor additions or tweaks to conform to your expectations.
Of course, none of the language specifically pertains to you.
Does that matter? It depends on who you ask!
Boilerplate legal language is a fact of life. In fact, it would be pretty strange if a contractor didn’t have language worked out for everything they do on a regular basis.
Although you’ll rarely need to write a contract from scratch, it’s a good idea to have your legal team thoroughly vet an agreement before executing it.
If a contractor isn’t willing to sign a contract your team developed, it may mean they don’t stand by their work. It’s always best to learn that sooner, not later.
Should You Negotiate With Contractors?
In almost all cases, the answer is no.
Experienced contractors usually have a fixed price for services based on project specifications. Contractors who are eager to negotiate may be signaling an intention to cut corners on your job.
Once the project specs are clear, there are two ways for unscrupulous contractors to save money:
- Materials: Using cheaper paints, surface preparation methods, and applicators.
- Time: Rushing to the next job, often by applying just one coat instead of two.
If you are pleased with the caliber of work you see in a contractor’s portfolio, the best thing to do is avoid haggling. This demonstrates respect and puts your relationship on a stronger foundation.
That doesn’t mean there’s no way to save money at all, however.
Once you have a written estimate for the complete job, you can make the right decision for your budget. Instead of trying to cut service costs, consider breaking down your project – half now and half later. This makes things more manageable and lets you build momentum, too.
The rule of thumb is this: Instead of adjusting time or cost, adjust scope.
What Kind Of Guarantee Should You Expect?
A guarantee helps ensure that things are done right the first time.
Dishonest contractors often won’t provide a strong guarantee. They are hoping that they will be well onto the next job – and the job after that – before you realize you’ve been short-changed.
You shouldn’t settle for anything less than a 1-year guarantee. Even so, it’s vital to have your legal team look things over and identify loopholes that might be used to avoid satisfying you.
A guarantee that looks like Swiss cheese is as good as not having one at all.
Standard Contract Issues In Industrial Painting
You’ll encounter these standard stipulations on most well-written contracts:
Time frame
A contractor has the right to attach a time limit to a given proposal. Proposals are a snapshot of the situation at the worksite at a particular time, and assets need to be held in reserve while waiting for your decision – so, a proposal is usually invalid after ten days.
Non-Payment
As with anyone else, contractors rely on their clients being straightforward with payment. Contracts usually define steps to be taken if payment is delinquent, leaving the client to pay all collection expenses and legal fees.
Unforeseen Circumstances
A contractor’s word is his bond, but there are protections to keep the company from getting roped in to a dire situation. For example, if a contractor discovers mold that needs to be resolved before painting, additional work – and fees – will result.
An Important Word On Payment Terms
If a contractor asks for all money up front, run the other way.
There are many different payment terms that upstanding contractors might use. These include net 30, net 60, net 90, and anything from zero down to 50% down. No matter what the specific terms are, however, the contractor should never collect all the money until all the work is done.
At Preferred, Inc. – Fort Wayne, we generally use a 50% down and 50% on completion approach.
This helps clients more easily predict what investment they’ll be expected to make and when. That adds greater stability to the business on both sides, avoiding confusion and complications.
What About Insurance?
The contractor is responsible for holding insurance for all matters that might arise during the job, including injuries to their personnel and property damage. Requirements vary by jurisdiction, so have your legal and safety team ensure all insurance is valid and up to date. If you are unsure about your own insurance obligations, consult with your insurer.
Project Contract: Right Way, Wrong Way
Jim starts off by negotiating hard and drives off two well-qualified firms. When he comes down to the contractor “willing” to cut prices for him, he doesn’t check in with his legal team. He ends up agreeing to a guarantee that’s all but useless when the contractor disappears.
Rob has his legal team carefully review each bidder’s contract terms. When he interviews bidders, he doesn’t haggle, showing respect for their work. Ultimately, he picks a firm that offers a strong guarantee that truly protects his investment in the work.
Remember:
- Most established contractors have boilerplate contracts covering their usual work.
- Contractors who aren’t willing to sign your own contract may be up to something.
- You should always have your legal team scrutinize all contracts and guarantees.
