homeowner backs out of signed contract

[huggytree]

a day ago i went to bid on a 1 day plumbing project for an elderly man. He signed my contract and needed the project done next week. I put the permit in the mail box, ordered all the parts, discussed the project with the inspector (its a difficult one)...

then i get a call this morning saying...' its all costing too much and im canceling the whole project'....i just said ok & good bye.....

i had to call the wife to get the permit check out of the mail box....i now have some parts to return or eat....all my time wasted and probably $15 in parts.....

should i send him a bill for my t&M?

should i have explained how he cost me time and money?

or should i have just said ' ok and good bye'?

ill be irritated for a couple days over this

[Patrysha]

I charge a deposit on contract, so I have never run into it myself.

I would just eat it unless I had been over the contract with them step by step and had a stipulation that there would be a charge if they backed out either without a certain amount of time or at contract depending on what the product/service was.

A photographer is going to have different needs than a plumber. Also depends on how long you need to replace a client. A client three months out is easier to replace than one on a day's notice.

[Dan Furman]

Nobody gets on my schedule without a deposit (which is non-refundable). Don't know if that's feasable for you or not, but it works for me.

[huggytree]

i may consider 10% down on larger projects from homeowners in the future.

alot of my homeowner jobs are small and done w/o me going to the jobsite to bid. so there is no way to collect

i had a lady ask for an appointment a couple of weeks ago, but she said she would try to find someone else sooner...i told her i wont write it down unless i actually have the job...she said ok you have it...then called me to cancel the next day......i can be her prom date if the popular guy doesnt ask her out...ill sit and wait for her as her backup plan....i am really angry with this type of customer....self centered users

[Harold Mansfield]

I'm in a different business ,but I would never order, license or do any work up front without a deposit.
To me , they aren't a client unless they put some money down.
I wouldn't get all bent out of shape over $15, and the fact that you put in time and money without a deposit is not the clients fault...it's a little too late to bill him now after he has told you he couldn't afford it.

[KristineS]

Why couldn't you just put a clause in your contract that says you get a certain percentage of your fee, or get reimbursed for your time or whatever, unless the cancellation is due to an emergency or act of God or whatever other situations you might feel would warrant cancellation? When they sign the contract, make that very clear to them that this is how things will work. I wouldn't have a problem with that.

[Paper Shredder Clay]

If you hadn't said okay and good bye, I think it would have been fine to bill the guy. But once you said "ok" to what he said then it might be considered a verbal contract. I don't know. But I feel your pain.

[Spider]

There is a thing in day-to-day business called Goodwill. The more you refuse to "do things for people" by insisting on every spick and speck being paid for, the more you will struggle with your business and never develop a really fruitful relationship with people - the sort of relationship that will lead to customers becoming raving fans, driving more business to you than you can handle.

Lighten up! Stop grabbing for every penny and let some of the cash slip through your fingers to help others.

[thx4yrtym]

From the BBB's web site -

"Under the Federal Trade Commission's "Cooling Off" Rule, you have three business days to cancel any purchase of $25.00 or more that you have made in your home or somewhere other than the seller's usual place of business, such as a rented hotel room."

This can be a very positive thing in a sales presentation if handled properly.

The 3 day notice should be part of your contract. Use it. Explain it to people. You are the only one that will. Builds confidence and people will often hesitate less to give you a deposit on the job when you have taken the time to show them a way out.

Why wouldn't you require a deposit on the contract. On window jobs it was always 50% down and the balance on completion. It's simply part of the terms of the contract.

People ONLY buy a solution to a problem and good feelings.


Regards,

[huggytree]

Money down is not normal for Plumbers...some do it...most dont...

Im having a garage built and I am having trouble giving a stranger $10k down...its 100% on trust.....I tell homeowner to look out for plumbers asking for $ down...i tell them i get nothing until the job is complete because im honest!.

I agree w/ Fredrick that this is just part of business.

Im still on my bad luck streak when it comes to business...Every other call i recieve is bad news and everyone is screwing stuff up on me....ive been stressed for a couple of weeks now and not enjoying my job anymore....I used to get a bad call or situation once a week or every other week...its just been 2-3x per day! lately!!!....im worried the bad economy is stretching everyone too far and making homeowners demand more..its all falling on me in the end...the buck is stopping with me and costing me money.

something has changed in the past month or 2....my jobs are getting in worse and worse neighborhoods, im expected to eat costs instead of passing them on

Maybe ill take the winter off and come back in the spring when the economy improves..2010? 2012? 2014?

[thx4yrtym]

Money down is not normal for Plumbers...some do it...most dont...

Im having a garage built and I am having trouble giving a stranger $10k down...its 100% on trust.....I tell homeowner to look out for plumbers asking for $ down...i tell them i get nothing until the job is complete because im honest!.



If that's working for you I would certainly stick with it!

The difference in my situation was that I was ordering custom sized replacement windows that could not be returned and were specifically sized for the job. There was no way we ordered the windows without a 50 % deposit and until after the 3 day period. There was nothing dishonest about it.

Regards,

[Spider]

Regarding paying a sizable chunk of money "on trust" : Small builders and renovators I have dealt with ask for money up-front, usually because they are quite under-funded and need the deposit to buy materials. This is what I always suggest - Ask for pre-payment of materials, and have the bulk of the materials delivered to the home site at the start and have the homeowner sign for them.

This does several things --

1. The materials become the property of the homeowner. The trust is needed for 24 hours only while purchases are made. After that, the homeowner has the materials he paid for.

2. Any cancellation is on an entirely different footing. There is no thought of asking for or returning the deposit because it isn't a deposit for work to be done - it is a purchase of materials, which the homeowner now has.

3. Once materials arrive on site, there is a psychological barrier to cancelling.

Not to mention the more efficient performance of the work by having all the materials to hand before the work starts.

[Dan Furman]

im worried the bad economy is stretching everyone too far and making homeowners demand more..its all falling on me in the end...the buck is stopping with me and costing me money.

This was probably written into the various recovery bills... "Huggy will take the brunt of it for the rest of us".

I, for one, thank you for your sacrifice :)