My contract process: Over the years I have met with many, many people to design a plethora of different projects. Projects ranging from simple bathroom remodels, kitchens, outdoor kitchens, and additions as well as complete home designs. The one thing they all have had in common is the contract process.
The Contract or Agreement
The contract or agreement is put in place to protect both the customer and the designer. Most of the contract is made up of legal mumbo jumbo commonly referred to as boilerplate. Boilerplate as it is affectionately called refers to standard legalese language which spells out what both parties rights are in the contract process.
My contract process is fairly simple and straightforward, unlike many I have seen over my career. The first portion establishes exactly who is to be bound by the agreement and where the real property covered by the agreement is located.
How Change Orders Work in the Contract Process
The next portion covers how changes to the scope of workaround to be handled. In this case, or more to the point what change orders are and just how they are handled. Early on in my career, change orders were drawn up, many times on a three part form. One copy went to the customer, one copy to the field worker and one to the office.
Forms such as this are often seen when working with a remodeling firm. For my self and my contract process, this has been simplified through the use of email. Changes to the scope of work outlined in the original contract are specified and a dollar amount for the changes is specified.
In order for the changes to take place, my contract process is to receive payment on the change order prior to doing the additional work. Unfortunately, this policy was instituted by fire. Waiting until the very end of the project to collect, it is sometimes difficult to collect. Therefore I now require payment for the changes up front.
The next portion of the contract deals with solving disputes and or canceling the agreement. For the situation where there is a sudden impact affecting either the client or myself, there is a clause which allows either party to gracefully withdraw and just how the finances will be handled.
Further, the contract states how should a disagreement take place, how it will be resolved without going to court and costing both the client(s) and myself big $$$.
How are Damages Handled…
Next is a clause which restricts the monetary scope of any disagreement should one arise. Neither party, when working with me will be subjected to some outlandish settlement.
Next, the “Right of Rescission is spelled out. My contract process gives you 72 hours from signing to withdraw from the agreement with no penalty. So, if you get cold feet or some event makes it hard to move forward you can simply cancel.
Right of Rescission in The Contract Process
The next portion of the agreement deals with payment. The estimated cost of the project is clearly stated. I say estimated simply because people change their minds and make changes. Changes for example such as deciding to add a second floor when it was originally agreed to be single story. Don’t laugh, it has happened and the customer wanted me to do it for free…
The Contract Process Payment Schedule
Finally, comes the scope of work. The scope of work details exactly what I am to provide and what your duties are in relation to the contract. Normally the scope will call out the square footage involved, rooms included, whether there is a site plan, Etc.. I always provide the scope of work in advance of going to contract.
The next portion of the agreement deals with payment. Depending upon how large the project is, a payment schedule is set up triggered by the stage of the design process. Initially, I always require a design deposit. The deposit is non refundable after the right of rescission has passed.
The Scope of Work in the Agreement
The scope of work in my contract process details what you are getting for the value called out in the estimated cost. If something you want isn’t found there, it isn’t included! Be careful and pay particular attention to the Scope of Work! Since I provide the scope in advance in the form of an estimated cost of the project, you have the ability to add or remove items prior to going to contract! Changes to the scope can affect the estimated cost of the project.
Contract Process summary:
In closing, the contract isn’t a scary thing, rather it is a guarantee about how the work will play out, much like a set of plans is to a carpenter. In the very beginning, when you sit down to go over your project, have specific goals in mind. Make a list and sleep on it before asking for an estimate. Once you get the estimate, look it over carefully to see that everything you want is included before you sign the contract.
You have no idea how many times after signing, a customer will come back and want something that isn’t included in the scope of work. Sometimes it is an innocent omission, and other times the customer completely changed their mind(s) like adding a second floor or wanting something not even remotely what was originally discussed!