DOES YOUR CONTRACT PROTECT YOU

From "The Worst That Could Happen"?

by Joelle Steele

Plant LogoA landscaper purchased four contract templates from me on my website, www.contractkingdom.com, and then called me with a number of questions about contracts in general, and about mine in particular. As a result, I revised my contract FAQs on my Web site to address some of the issues he raised. But one of his questions was about customizing the parts of the contracts that pertain to specific jobs — the services provided, the services not included, and all the "what ifs" that could occur. He wanted to know what he should include about each specific project he does. Tough question.

Most contracts, including the ones I write and sell, are built around anticipating what could possibly go wrong and then using language to nip it in the bud before it does. For example, I have included the most common exclusions and limitations clauses in my contracts, such as ones for excavation and non-payment. But every project is a little different. You, as the contractor, have to analyze each potential project and ask yourself, "What is the worst that could happen here?" Then, you should compile a list of as many worst case scenarios as you can imagine for that particular project. Those should then be written up and included in the contract for that project.

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Here are some examples of real contractual disputes that illustrate the need for contracts and for those contracts to contain very thorough language to cover everything that could possibly go wrong.

Interior Landscaper v. Condo HOA: An interior landscaper had maintained a large atrium at a condo complex since three months after the installation. The plants were dying, The HOA was demanding that 80% of the plants be replaced free — a wholesale plant cost of about $48,000 plus labor. The plants were over- and under-watered. The contract guaranteed free replacement for any plant that died while in the interior landscaper's care and did not dictate the conditions for such replacement. The building's architect and landscape contractor had designed the atrium. Neither could be located. The interior landscaper finally excavated two planters — they had no drainage whatsoever. Lucky for the interior landscaper as they were immediately off the hook and the HOA immediately dropped the matter. If the planters had been okay, it would have been very expensive for the interior landscaper. Your maintenance contracts should always include language that limits the conditions for free replacement, especially for projects designed and installed by others.

Landscaper v. Homeowner: This was a design-build project in which a landscaper installed a landscape around existing trees at a residence. There was a signed contract and the job was three years old. The landscape contractor was being sued in Small Claims Court for refusing to remove two trees that were diseased and in danger of falling onto the house. The landscaper stated that he had written a letter to the homeowners before the contract was signed, telling them that the trees should be removed. He said that they had refused to have them removed. The homeowners denied ever receiving such a letter. The landscaper had a copy of the letter. Nothing about the trees was mentioned in the contract. The judge pointed out that the letter was not sent certified and there was no proof it had ever been mailed and received by the client. The landscaper lost the case. Had he simply inserted in his contract a waiver of responsibility for the trees he would not have been taken to Small Claims Court. Your contracts should always include every single thing discussed, including reiterating any other oral or written agreements made that pertain to the project.

Landscaper v. Subcontractor: A landscape contractor was being sued by a subcontractor for payment. Under the terms of the project contract, subcontractors were to be paid by the landscaper. The subcontractor was paid for a portion of the work but not the remainder because the landscaper deemed the work to be substandard and hired someone else to redo and complete the work. The subcontractor argued that the work was performed correctly. There was no contract between the landscaper and the subcontractor that outlined the specifications for the work. It was also not outlined in detail in the project contract. The Small Claims Court judge dismissed the case because there was nothing in writing between the two parties and no photographic proof that the work was or was not substandard. The landscaper was lucky; the subcontractor not so much. But both contractors erred in this transaction. Your contracts — for the project and with your subcontractors — should always fully outline the scope of the work to be performed, down to the smallest details.

Interior Landscaper v. the Not-So-Happy-Couple: An interior landscaper provided floral services for a wedding. When the interior landscaper went to the flower market to purchase the flowers, the exact color in the flowers requested for the four altar arrangements was not available, so another flower in similar form and in the right color was substituted. On the big day, the bride saw the flowers and was furious because the substituted flowers were her least favorite — gladiolas. After the wedding, the couple refused to pay for the altar arrangements. The interior landscaper took them to Small Claims Court — and won — even though there was nothing in the contract that addressed substitutions. It could have gone the other way, but the judge ruled that the arrangements were beautiful and that to have used a flower that was not the right color would have been worse. Small Claims could have been avoided if the interior landscaper had added a sentence about substitutions — that they might be made, and what flowers would and would not be acceptable substitutions.

It pays to be thorough in your contracts — leave no stone unturned, anticipate the worst, and be protected in case it happens!

This article last updated: 09/12/2010.