Why contracts ARE worth the paper they’re written on
In the current economic climate homeowners are naturally more cautious about investing their savings or borrowing to improve their home.
The media is full of horror stories about cowboy contractors and consumers are becoming savvier about their rights and protecting their assets.
Increasingly they are asking their builders for contracts for domestic projects so proactively offering them for your work brings an extra sense of professionalism and security to your business relationship and will help build consumer confidence in your brand.
There are a number of key benefits to using contracts:
Proof of agreement
Entering into a contract with your clients ensures both parties know what is expected from each other, and provides proof of a professional agreement between you.
Verbal agreements often include colloquialisms and short-hand which leaves room for interpretation and confusion further down the line. The process of fleshing out a contract helps both parties in terms of clarifying exactly what the other needs or wants and reduces the scope for misunderstanding.
This is particularly important where the project is complex, you have agreed to accept staged payments or where the cost of the work is significant.
If there are any changes to the terms outlined in the contract as the work progresses, which you both agree, those changes should also be set out in writing and signed/dated by you both – avoiding those awkward discussions about extras which the client thought were already included.
Agree how much is to be paid and when payment is due. You should discuss whether you expect to be paid for materials up front or whether the cost of materials is included in the price. Also, do you need a deposit? Does your client need to pay for additional items like scaffolding or skip hire? Who is paying the building control fee? When and how should the final bill be paid and what happens if it is paid late? Agreeing payment terms up front will help avoid any disputes later on.
Peace of mind
When a contract is generated you can rest easy, safe in the knowledge that the terms of your agreement have been finalised. This gives you peace of mind to get on with the build without having to stop at every stage to agree the next step.
In the event of a dispute contracts also provide a legal basis for your claims, helping to ensure a speedy and just resolution.
There are many different forms of contract and they don’t need to be complicated. If you decide you need a written contract and you do not want to deal with this yourself, you can purchase standard forms of contract from the Joint Contracts Tribunal (JCT).
You may have access to contracts through a trade body or membership organisation.
For example, FMB members can access a suite of contracts for England and Wales, Scotland and Northern Ireland through the member login portal Commercial and industrial building contracts, building contracts for domestic work and subcontractors' contracts are all included.
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