Yesterday I attended a presentation for construction professionals titled “Drowning in Paperwork, or Ten Ways To Stay Out Of Trouble With Your Lawyers.” It was made by attorney Eric Phillips with Wendel Rosen Black & Dean, and hosted by Truitt & White Lumber in Berkeley, California. Among the presentation’s main points was the fact that having a proper contract, a complete paper trail, and excellent communications can make a huge difference should a dispute arise between contractor and client. It was also noted that California has some of the nation’s strictest contractor requirements.
I am not a lawyer and the following suggestion should not be construed as legal advice. (that’s an example of clear communication…!) During the approximately thirty years I have been in the trades, I have often been amazed at how incomplete other contractors’ contracts were. Even today I can not think of one contractor whose construction agreement lives up to the standard required by the Contractor State License Board. Do yourself and your clients a favor and follow this link to the CSLB website to see a comprehensive example of what is required. (Scroll down the page to the heading titled “for Contractors.”) Yes, it is a lot of paperwork. Yes, it is a pain in the rear end that with every change order you are supposed to include a Mechanics Lien notice, but so it goes. We live in a litigious society. Speaking of which, even when you have updated your contract docs, it may still be a good idea to have them reviewed by a lawyer like Eric who specializes in construction matters.
My company has been fortunate to rarely have had disputes with clients. This is due in part to spending ample time on effective communications; to the fact that 95% of our new clients are referrals; and to using my intuition. If I sense that a prospective customer is not a good match for my company, I decline politely and walk away. Hasn’t this cost me some business? No doubt, but it also prevented major headaches and legal expenses.
Please chime in: how do you stay out of trouble?