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15 Clauses for Your Next Client Contract
Creating a client contract for an installation is usually pretty straightforward, but there are some clauses that you may not have considered before.
Besides the “normal” stipulations that outline the installation, such as progress payments, warranty and scope of work, Sean Hansson, owner of Logic Integration in Englewood, Colo., offers these 15 nuggets of advice for your next contract:
Estimate expires in 30 days: Integrators should make sure to put an expiration timeframe in their contracts. Without it, you might have a client sit on a proposal for years and then come back to you claiming the pricing and equipment offering is still valid.
There is a design retainer fee if you don’t get the job: Some integrators are still wondering how to charge for design fees. If you get the job, the fee does not apply.
Only three free versions of engineering docs/designs will be made: Make it clear that the client will be charged for extra copies. You can’t be expected to supply these documents for the client's friends, neighbors, etc. If they want more, charge them.
Integrator can replace equipment vs. the Estimate: This clause gives you flexibility to change out specific equipment if necessary to due incompatibility, discontinuations, etc. Likewise, you should stipulate that you are not responsible for product discontinuations.
Integrator is not responsible for damaged or missing “existing data” on computers (videos, images, etc.): This is an important clause to include if you are working with the home network.
Integrator may use images of the job for promotion: Simple, but what a good idea.
Time delays caused by customers may be invoiced: If the client is holding up the job due to indecision, that can snowball delays on other jobs.
There is a $20,000 limit per credit card payment.
The job is insured by the integrator: This is just a clause to show the client how responsible you are.
All change orders will be in writing: No changes over the phone or verbally without written documentation.
There is a 15 percent equipment re-stocking fee due to a change order: Why should you eat the labor of re-stocking a part? Besides, you might end up eating it if it was a one-off.
Electrical work will be billed separately at a designated hourly rate: It’s good to clarify that high-voltage work requires separate expertise and will be charged for accordingly.
Change orders can alter the payment schedule: If a change order requires the purchase of an unanticipated expensive piece of equipment, you cannot afford to float that purchase.
Client cannot recruit integrator staff for a “side job” and will pay damages up to 30 percent of technician’s annual pay if he does: Sometimes your “trusted” installer is contacting the homeowner behind your back saying he can do the job more cheaply. This clause will inhibit that from happening.
Good faith resolution must be attempted for disputes: This slows down the potential for legal action if something goes wrong.
This article should not be construed as legal advice. Please consult your attorney.
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14 Comments (displayed in order by date/time)
Why the $20k ceiling on CC payments? I love those AMEX Black cards…
Some integrators are still wandering .....
true statement, but probably not in this context
I dont mind full payment on credit card. Pricing clearly states the 2.7% card fees applicable.
@DeAnne—thanks for catching my typo. Sometimes, I am wondering if I am wandering too!
@ Jason-I definitely am…..wandering that is
@ tuck- you cant do that in all states, adding the cc fee on is illegal in many places
DeAnne, I have heard that. Never understood why a cash discount would be illegal. But ‘dems da rules in some places I guess!
I believe that adding a surcharge for credit card transactions is illegal, but offering a discount for payment by cash or check is ok. I’m not a lawyer though.
Adding the CC surcharge is not illegal - but it is against the terms of your merchant agreement. Stipulating a discount for cash is the way around it.
@DaveG & Jonw:
You’re both correct.
Dave,
A few years ago it was illegal to add a surcharge if the client used a credit card. The original claim/reason for this is that it took money away from the banks. However, today it is perfectly legal.
JonW,
Not all merchant agreements are the same. However, companies like American Express will give the merchant a better discount if you ONLY accept their card. If you also accept Master, Visa, Discover, Amex will typically charge you a higher rate.
Matter of fact, American Express made a beautiful, “spin doctor,” advertising campaign to this effect by stating, “Joe Blow only accepts the American Express Card at his business because he only wants the best for his customers,” (I’m paraphrasing here).
All credit card vendors/merchant services are negotiable. Do yourself a favor and don’t simply accept their terms. They want you business and will do anything to keep it.
In case anyone wants to check it out, CE Pro has a relationship with a group of services via our “What a Great Deal Program”, one of which is Chase Paymentech. You can go to this URL for free and plug in your credit card usage to see if the program can save you money.
Chase Paymentech
Thanks for the insite. We employ some of the ones learned first hand over the years. I wonder though, if you can fix your header, not to print black when printing out the story. Mega-lines lost.
What do you mean by “the job is insured by the integrator”? During installation? After work is completed?
Nolan—Here is a specific clause:
4. Insurance
The Company shall purchase and maintain such insurance necessary to protect from claims under workers compensation and from any damage to the Customer’s property resulting from the services provided by this Agreement.
Great tips, thanks for sharing, CE Pros!