Contracts

[coolcatkelso]

Hiya guys

As some of you may know I started out myself in business in January, all is going ok, a bit quiet now but work is coming in for next month etc.

A wee problem that I came across a few weeks ago tho that I wanted to get some feedback on

I priced a job in my local town, (Kelso) It was an insurance job for a guy whos pvc gutters had come down in the heavy snow at xmas. I estimated for labour & materials at £800ish off the top of my head rgt now.

I left him with the estimate and he got back to me a few days later, instructed by the insurance company to accept the bid as it was the cheapest one so far.

All being well I spoke to the customer on the phone several times and he wanted to wait a week or two so he could paint the facia boards before the new guttering went on. I called the customer a few weeks ago to arrange a start date and it was decided to be the this week. I turned up on Friday to start removing the gutter brackets etc only to find that he has already done the work HIMSELF..

So, am I right in thinking, that he has made a claim to the insurance company, they have asked him to get quotes, he has sent the quotes back etc and it has been approved. He has done it himself and pocketed the money?

I am just glad that I didn't go a head and order all the new materials up front..

Do any of you guys have something in place to prevent a disaster like this?

I was thinking of amending my t&cs to be something like, to accept an estimated / quote, a written acceptance letter should be sent to (ME) signed by the customer..

Somewhere in the terms have something like - If for any reason a customer backs out of the acceptance (workorder) all costs will be liable to the customer, including time to estimate / quote etc etc???

Anyone got any ideas?

Cheers guys

***Update***

I have in my terms & conditions which apply when a customer accepts my estimate / quote

Section 15a - Cancellation of a customers order will be accepted only at the Company's discreation and the Company reserves the right in such an event to charge 5% of the estimate / quote for all costs incurred prior to and / or resulting from such cancellation in addition to such other remedies as it may have


According to my laywer, who put together my T's & C's, once a start date has been given to the customer, they are then bound by a legal contract, and unless they give any written notice of cancellation then I can still charge a fee even tho I offer free estimates. The original estimate was for £987.42, @ 5% charges that would be £49.37 payable. He says if they fail to pay, a letter could be sent to the insurance co informing them of a fruadulant claim

Is it really worth it for £49?

 

[^woody^]

You wont ever avoid anything like this. It is a common "scam" of all insurance claims from homeowners. Sometimes the insurer will only pay a bona fide invoice to prevent this.

If Scots contract law is the same as ours, then once your offer has been accepted, there is a binding contract and you can claim for losses if the client pulls out - and you do not need a specific contract clause for this. However you can only claim for genuine expenses (say if you bought materials) and not for the time spent preparing quotes or site survey.

The only practical way around this is to charge for your quote and visit, and deduct the charge from the bill if you get the job

I think as you have just started out, put this down to experience

 

[htgeng]

The only practical way around this is to charge for your quote and visit, and deduct the charge from the bill if you get the job

I think as you have just started out, put this down to experience

It happens a lot when the householder receives the cheque and suddenly they see pound signs in their eyes! You were duped into spending your time/fuel to give him a quote when he intended from the outset to do the work himself.

Friend of mine who is a handyman had a variation on this scam when he quoted to replace a carport which had collapsed in the snow. The owner wanted it rebuilding but half the size. He quoted something like £1400 for like for like which the insurance company agreed on and paid the homeowner.
When he came to ask for the money the owner gave him £700 as the new carport was half the size! I think he clawed the difference back with addons but I thought the cheeky **nt! I'd have invoiced for the lot if it had been me.

 

[Alastairreid]

Welcome to the world of the self employed coolcat!

Some insurance companies issue cheques in the contractors name after completion of works and presenting final invoice. The cheque would be less the customers excess.

I would bill the ar$$e for the full amount

 

[Mw Roofline]

Do any of you guys have something in place to prevent a disaster like this?

a deposit

 

[coolcatkelso]

I have in my terms & conditions which apply when a customer accepts my estimate / quote

Section 15a - Cancellation of a customers order will be accepted only at the Company's discreation and the Company reserves the right in such an event to charge 5% of the estimate / quote for all costs incurred prior to and / or resulting from such cancellation in addition to such other remedies as it may have


According to my laywer, who put together my T's & C's, once a start date has been given to the customer, they are then bound by a legal contract, and unless they give any written notice of cancellation then I can still charge a fee even tho I offer free estimates. The original estimate was for £987.42, @ 5% charges that would be £49.37 payable. He says if they fail to pay, a letter could be sent to the insurance co informing them of a fruadulant claim

Is it really worth it for £49?


Read more: //www.diynot.com/forums/viewtopic.php?t=275065#ixzz1MpOD691p

 

[^woody^]

Again this is English contract law, so I don't know if it is exactly the same north of the wall ....

Contract law dictates that a contract is formed once an offer has been accepted - not when a start date is notified ... so I don't know where your lawyer studied law

There will also be some other points which must be satisfied for the contract to exist between you.

If you have a contract and one party pulls out then the contract is "frustrated" and the other party can claim for any costs incurred in relation to the contract - as per my previous post. Now, these must be actual losses incurred specifically and legitimately pursuant to the contract (ie material orders, out of pocket expenses etc) you can not claim for your estimate time as this was done before the contract existed and so is not part of it.

You can put what terms you like in your T&C, but if they are not lawful, not fair and not realistic, then they will not be enforceable

So your T&C for 5% of the estimate cost must pass a few tests before it can be deemed enforceable, and on the face of it it would not appear to be so in this case