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Discussion Starter · #1 ·
I have a signed contract from a real estate company to plow their lott. We charge them per push which was clearly stated in the contract. Our first storm was 21", and they were billed appropriatley. Now, they say we did a great job, lott was the best they have ever seen it, BUT we can't afford your services, they say they misunderstood the contract. The kicker.... They can't afford to pay me the $$$ they owe me. I have never run into this before, so now what? This really irked me, being it was a new property we put forth some extra effort to make it look good, first time there. I'm stumped.


Thanks
Rick
 

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If it was a misunderstanding, it may be worth sitting down with them to renegotiate. If you have any wiggle room it would be worth it to keep them as loyal customers, who would then pass on your name to others. That said, if there is no room for profit, you may have to walk away. Although, be sure to leave on an upbeat, friendly note. Write them a nice letter when all is said and done, apologizing for any misunderstanding and leave the door open for future work.

Should something happen in the future, and they cannot find anyone less expensive, or who does as nice a job, they may have to find the extra money to do it professionally, and that would be you, since you left professionally.

I have had some situations like this, almost always, I have been called back eventually for work, because they were happy with the way I dealt with the situation.

Either way, you don't want any business to badmouth you for your work and professionalism. If they deal with people buying new property and houses in your area, its nice to be on their good side.

Good luck.
 

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I've never run into this problem, but I suggest that you contact the owner/manager and offer this as a negotiation.

"Sir, I understand that there may have been some confusion about the terms, but you did agree to the price per push." After he/she agrees (there is no way they can not with that statement) Then say something like this. "You like my services and the quality of my work don't you think it's fair to pay me at least the contract amount of one push?" Again if they are honorable they will agree and you at least have some of the money recouped easily.

Was the amount of snow abnormal for your area? If so, explain that it was unfortunate that this type of storm hit for your first service, but you shouldn't be penalized.

Does your contract give push depths or did you have to go multiple times to keep the business open during hours, etc?

Then if all goes well suggest to them that there might be alternatives ways to structure the contract for this type of storm. Keep them talking and friendly and you may find a way to keep the account.

If none of that works... RUN don't walk to your local courthouse and file a small court claim immediately. Attach a copy of your documentation. Make sure that you show up in court at the appointed time, be polite with the majistrate and you will come out the winner. Also, if the firm has been around for any lenght of time they will not want to go to court because in most areas the small claims judgements get posted in general civil action reports and they WILL NOT want their name being listed as a judgement debtor.

good luck


~jerry~
 

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Sure you have to talk to them . But they cant be that naive ? It sounds like this 21 inch storm used up there entire snow budget for the year . Unless they are new from down south I think they are playing you ?
 

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I find it strange that they cant come up with the cash. How much do they owe you for the service ? If they buy a sell houses they must have some cash somewhere its a case of maybe they dont want to pay you for your services and not a case of they cant afford to.

Who is going to plow for them now or are they just going to let it pile up ? What if it snow in the mean time your not going to plow it will you ?
 

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Discussion Starter · #6 ·
I don't know what to do about the next storm? If I don't plow they are stuck, if i do , who knows whether I will get paid. I did find out that the guy they had last season, plowed the whole season for them, for gues what $500. I laughed, and said you got one hell of a deal for a 112" season. I called2x and am waiting to hear from them. I want to be professional about this, because I have alot of work in the area, and don't want a bad rap.
 

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Selling property is a profitable business theve got money and you did the the work. if there really straped for cash i would make them set up a payment plan for them to pay you the full cost of what is owed if they still refuse to pay on a payment plan then i would head strait to court... if their business they deal with contracts daily they know how to read them... it sounds like a case of they just dont want to pay the expence of the bill and are hoping they can get out of it... i would definatly try coming to terms out of court but i would definatly also get my money if it took going to court...
 

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That's exactly what a written, signed contract is for - to settle potential disputes.

If the contract clearly shows that you're "in the right", simply take them to court, present the signed contract, and I can pretty much guaranty you that you will win without saying a word to the judge.

Good luck.
 

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Rick,

Look at it this way. This is a real estate company. What is the first thing ANYONE does when purchasing property? Review and SIGN a contract. If they do not know how to read and/or understand a contract than who does?? It would be different if this was I first time business owner and the first time they have ever used a snow plowing service but this is clearly not the case.

Secondly, what happens after an offer is made to purchase property and the contract is signed, they negotiate, and renegotiate. They are in the business of MONEY plan and simple. You can bet if you signed a contract for a propoerty and the deal was accepted and than you told them, "BUT I can't afford this property, I must have misunderstood the contract" you would be looking for a lawyer because they are going to tell you the contract is binding. DO NOT back off your terms, unless you want the rep for doing that, remeber also real estate is about referrals. Do you want them refering clients to you being know as the guy that does a great job and will charge less if you just tell him you can not afford the bill.

I would have to say you have a few things you need to do and quick.
1) Write them a letter clearly state what you put in your post. That your understanding is that that love the service, there was no defult by you in providing service BUT some how NOW after the fact there is a problem with the bill even though bill rate are clearly stated in the contract wheich they have signed.

2) Make it very clear in the letter that as they have stated, if htey can not pay based on their default you can not longer provide service effect NOW. Because if it does snow and you do not plow they WILL say they were going to pay, but you failed to provide service and they had to find someone else, AND due to your default they are going to pass the bill onto you for failing to provide service which lead to a foreseeable breach of contract.

3) Not sure how much the outstanding balance is but start looking inot filing with the court, not a collection firm. This is a clear DEFAULT of contract not a slow pay.

I had a situation like this with BP/Amoco on a four account seasonal contract. After being three month behind I continued to provided service. this was a 1" trigger that include salt with zero tolerence. I had serviced these account two years previously and htey were always a slow pay but in the past I dod get paid. When I get a call from the NEW area manager saying the past due bill was TOO high, and although I am doing great service, better than any of his other locations he can not see paying the bill what can we do about it? Told him to read the contract, that terms we set by the area manager not by me I just wrote the contract to met their needs. Well guess what, "I can not find any copy of any contracts for any of the years you have plowed for BP" he tell me. OK, I faxed him copies of all the contracts, and all the past invoices that showed the chronic late pay but al lpaid in full. I than sent a letter to the corporate maint. director tell him what was going on and I suspended service until payment for the balance of the season was wire transfered to my account coping my lawyer. The Maint. director called me and stated he had not idea this was going on, but after looking into it learned this new area manager was doing this to ALL the vendors as all the store he was managing. The money was in the account two days later, and I am still doing business with BP/amoco.

I know this was long, but I hope the information given had answered you question about what to do, and if anyone has seen this.

GOOD LUCK stand up for what is right this is about good v. bad business.
 

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No point in repeating what others have already said, as I agree with them. Depending on the importance of the contract and your take on how willling they are to work with you, you might propose a payment plan or restructuring the contract for the rest of the season to meet their needs. However, this should not negate what you have already done for them, nor should you reduce your charges. A 21" storm takes a lot of work and you upheld your end of the contract.

One of the challenges we have as service providers and as professionals is helping our customers asses the best type of contract for their budget requirements and their perception of risk.

Last year I met with a board of directors for a church and presented a plan to them based off of what I understood they were looking for. They accepted the 1" trigger and proactive level of ice control applications. It wasn't a black and wet contract, but fairly close. I made the mistake of not specifically asking for the overal winter budget. We blew it by early January in what turned out to be a very heavy winter (third snowiest on record in Cleveland). We restructured the scope of services for the remaining portion of the season. Unfortunetly they were bitter about the experience and did not resign this year. I was disappointed and it would be easy for me to justify it as their responsibility for choosing the contract type. After all, I did present to them and answer questions for twenty minutes in front of 11 decision makers. What I learned is that for me to be successful (maintain my customer base) I must match the service to their expectations, which starts with the contract. The lesson learned is don't be afraid to ask what the budget is and then structure the contract accordingly.
 

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I had been where you been and thought that I would increase my account list if I could just get my services within clients budget.

What I learned from that method is- it works great for grass cutting becuase you know the grass is going to grow and you have a good idea what it will take to get the job done for the entire season. However, on the filp side, this WILL NOT work for sonw as you learned with your church group unless you are will to go with a seasonal contract and there budget can meet your projections.

I do service two church locations and I picked them both up as new customers in the spring. When is came to snow plowing we sat down and they were both on a per push and tonage for bulk salt and were not happy with there previous bills. I told them to bring what they paid for winter serive for the last three years (the actually invoices not just word of mouth) to the meeting. I brought two examples of like size accounts and showed what my billing was one being seasonal one being per push. We worked the numbers and I ended up with a 3 year grass and snow contract with both of them. They are happy, I have two clients for the next three years, and waht better than a two churches as a reference not to say what kind of referal business it will bring in.

Just keep in mind I was not willing to just drop my pants to get the work either. If you are looking at a per push account their budget can be of not importance to you, UNLESS you have come up with a way to positively know how much snow we will get. Otherwise you are running the risk of giving the impression that no matter what happens you will be within the budget leaving you in a bad situation should you get a record setting snow fall.
 

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Discussion Starter · #13 ·
Saturday afternoon, Guess what? A Check was hand delivered to the house at 4pm. Also, with an apology from the associates in the place that make the decisions. They also wanted to sit down and discuss a seasonal contract for the rest of the season. No problem, I was diplomatic about it. I got a fair price for the season, along with this time I added a cancellation clause. So hopefully this issue is resolved. Thanks for the replys gents
 
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