contracts

[ironman186]

Hi 

Wondered if you all might help me with a question .What do most blacksmith/ironwork shops ,

use for a contract ? I have been in business for 15 plus years and always trusted my customers ,

recently I fell in to some troubles with a customer and ended up not getting paid in the end .

YIpes . I want to have faith in my customers but need to feel more secure that I will be paid etc.

Does any one have a contract form that they fill out the specifics of each job and then get signed etc .

I have looked into legal zoom .com but I'm not sure if it fits our trade .Thanks for any ideas you might have .

[Jim Coke]

Greetings Ironman,

 

I too trusted MOST OF YOU CUSTOMERS...  When I ran my shop (retired now) my contract was simple....   40%  down  on approved drawing

                                                                                                                      

                                                                                                                                                                              40%  shop inspection pre finish   (REQUIRED)

                                                                                                                                                                      

                                                                                                                                                                               20%  COMPLETION

 By requiring the customer to come to you shop before completed it works best and you catch any mistakes.. 

 

And get most of your money....   

 

 

I hope this helps...   no pay sucks...

 

Jim

[ironman186]

Thanks for the reply Jim , I appreciate the input . I work in a hole in the wall and try to not get the customers in the shop.

I was onboard for a nice steel building and then the economic collapse got in my way . Still hoping thought .

Is 40 to 50% down typical ? Thanks again all

[Glenn]

A good labor lawyer can write up a contract that should win in court.

 

I would suggest that you get the cost of materials up front, all of it. That way if they back out, you have the materials paid for. And no refunds. After that it is between you, the lawyer, and the client. The cost of the project should include legal fees.

 

Have the client sign off on several stages of the project, approving the work.

[Jim Coke]

Greetings Again,

 

Sure 40% down is fair...   I use to feel bad but after a sting or two you get smart....   Lawyers get retainers.... Doctors make sure you can pay first...  Anything custom on line must be paid first...   We are DR. of metal ... Money down keeps everyone honest...  If you don't want customers in your shop send them a picture of there work before completed and ask for the second 40%..   When I closed my shop I was a year and a half behind with my commissions...  

 

Great work demands price....   Just tell them its large jewelry..

 

Jim

 

 
 

[Kevin W]

I don't do contracts either, most of my jobs aren't worth going through the legal hassles and lost time. That's not advise, just how I've done it, and it's not 100%. No pay sucks indeed. been there.

Mostly I do 50 % down and 50 % on delivery ( delivery happens before installation! ) If someone else is doing the installing they'll just be scratching their heads as to 'howz this thing work?' if I have to leave the job site without the remainder.

Big jobs (3 months or more) I do 1/3 down 1/3 in the middle and 1/3 on delivery.

My experience has been most folks really don't mind a bit. Some need to understand what it costs to get a job started and how you and yours have also got to live off that money till you can get them their completed project and others don't. It's a different way than an automatic deposit in the account every week or to so it calls for some splanin'. I've found that those that bawk about it are often difficult customers also.

Ironman, if your still at it now then you must be doing something right.

Kevin

[doc]

I've pretty much done what Jim and Kevin have done or a combination of one or the other depending on the job. But what I've always done was write a proposal! This states exactly what I intend to provide the customer for the money changing hands. The customer signs off on the proposal making it a simple contract and in general keeping me from having to provide more work than I'm getting to do.

[Mark Emig]

I have learned recently (again), to ALWAYS have some sort of a contract. I took on a railing job for a good bit of money on a handshake. 1/2 down, remainder when it was done, before installation. Well, the lady DIED. Now her estate is in probate, the lawyer is demanding a contract before payment. To make a long story short I have 2 rails completed outside my shop, and no dough in sight. Get some sort of contract with a signature, or it can cost you.

       My Dad always said, if it costs you pain, blood, or money you learn from it. Sometimes you get all three.

[rockstar.esq]

Good folks don't fear contracts.  Look into what's required to file a  mechanics lien in your state.  Any contract that meets those obligations will give you leverage to get paid through a lien filing.  Filing a lien isn't free and it's not a guarantee that you'll get paid.  However it puts a kink in their property transactions which is enough of a pinch to get reluctantly honest people writing a check.

 

I think some folks overdo it thinking that twenty pages of boilerplate will teflon coat them. Well written doesn't always mean long.  In the construction industry it's typical to require lien releases for progress payments.  Materials are "front loaded" in that they're billed out immediately however some clients require proof that the materials is on hand.  Industry standard is 10% retainage which is a straight across the board deduction on all progress payments which is held as surety until final completion.  Generally speaking 10% of contracts total will exceed the profit margin for the contractor.  You can't break even without completing but they won't put you out of business waiting to get paid either.

 

It's a touch off topic but I'd caution against "helping" a broke customer.  It's remarkable how discounting your work and tailoring it to their budget is rewarded with endless re-designs, complaints, and delays in payment.  Long ago I learned to "upgrade my customers" and focus on customers who started with a budget to match their vision.  I call them "professional customers".  They know the going rate, they know they must communicate well, and they know a fellow professional when they see one.  It's always a pleasure working with those folks.

[tzonoqua]

My terms are 50% down, 50% upon completion, installation extra. Contracts are only worth the paper they are written on if you have the money and legal support to back them up. If you have the deposit then at least you are not out of pocket for materials. Time is another matter. I suppose though my "contract" with the customer is the printed invoice/deposit receipt that the customer signs that outlines the terms of the transaction. Whether that is technically or lawfully a contract, I don't know, but at least it is a document.

[John McPherson]

There is a guy who has a website, books and a contractor's consulting service called "Markup and Profit" who spoke at a NOMMA convention a few years ago. Contracts, bids, spotting bad customers and avoiding no-win situations are a big part of what he covers. He generally has a lot of good advise, hard-won from years in the field. 

 

No, I am not selling his product, but I do subscribe to his free e-newsletter. The website and blogs are free, and you could probably get the book from a library. I wish I had it when I started out years ago.

[Wroughton]

Thanks for the reply Jim , I appreciate the input . I work in a hole in the wall and try to not get the customers in the shop.

I was onboard for a nice steel building and then the economic collapse got in my way . Still hoping thought .

Is 40 to 50% down typical ? Thanks again all

The firsts in the Medici line in Italy used to call Niccolo Grosso (aka Niccolò di Noferi del Sodo) "Il Caparra"

 

Nick forged some classic and famous lighting forms in Florence for the elite. 

 

Caparra translates to "down payment" or "part payment". 

 

Certainly not the first blacksmith but definitely one of the greats was essentially called "ol 50%" by

some of the worlds first bankers. I didn't get the sense it was a term of affection either. 

 

 

All this in the 1490's. I think there's some precedence for getting your money up front. 

 

 

Personally, I'm going to start employing Mr. Coke's strategy. 50% to start and 50% at the end leaves me a little dry

if they decide they don't want to pay the last. 

[Chris Parsons]

I require materials to be paid upfront, or I won't take on the job. I have a very simple contract that states this. It also states money is due in relation to the amount of work done should you back out. None of this is refundable. You sign and date it, I sign and date it and give you a copy and put a copy in my file cabinet. It isn't full of legaleese junk, just the basics. I will build XX for you for $XX. It may not be legal if challenged, but I can tell some people think really hard about their projects before signing. So far, this has worked for me.

 

Chris