If the contractor you hired to renovate your condominium doesn't carry out the work the way you both agreed, what are you going to do about it? If the real estate broker you hired to sell your cottage didn't complete the agreed marketing activities, what are you going to do about it? If a professional or business, hired to undertake mutually-agreed-on tasks, does not fulfill their obligations, what are you going to do about it?
By the time things go wrong, it's too late.
The precautions that maintain your control in times of dispute must be in place before the hiring is formalized, i.e., you sign or pay a deposit. Without prudent safeguards to protect your investment and your rights, you can end up fighting just to get what you paid for. In a battle to make professionals or companies to honour their commitment to agreed work, you may be at a disadvantage. This is the first time for you, but the other party may consider this standard procedure.
You'll end up with stress, time lost, extra cost, and a job not well done, unless you think ahead:
- Once work has begun, you'll be playing catch-up if you start defining project specifics on the fly.
- After you've paid some or all of the entire amount agreed to, you may discover the other party has mentally moved on. Their resistance to correcting problems or fulfilling obligations may grow. That's if your calls or emails are even returned.
Don't rely on those you hire "being nice." Stop looking for new friends and concentrate on the best fit for work that must be finished to your specifications.
When the other party—professional, company, manufacturer, etc.—doesn't fulfill their end of the agreement, your "ace in the hole" is the contract. Or is it? A contract is a legally-binding agreement between two or more parties to do something or deliver something according to mutually-agreed terms and conditions.
- An oral contract may be legally binding, but without written evidence of a contract (which is what the signed paper represents), it can become a "he said, she said" situation where details are hard to prove.
- The more detailed and specific the agreement, the easier it is to point to things not done or not completed with the agreed degree of skill or quality. Just signing "something" is not enough.
- A partial-payment schedule, set at agreed intervals or when specified aspects of the project are completed, allows for monitoring of progress and quality throughout the project, not merely upon completion. This can make corrections less expensive and more manageable.
- Discussions that generate necessary details, usually also address common problems and misunderstandings in the process. The resulting mutual understanding of the work ahead reduces daily disagreements and liabilities. Unexpected events or circumstances can be covered by including guidelines for resolving challenges beyond those specifically outlined. Contingency planning like this can help the project stay on budget, because the original budget must incorporate details provided in the contract.
Take time to think through the project and you'll create clear criteria on which to base the agreement. Many professionals have their own standard contracts, but don't be shy about questioning terms which heavily favour the other party. When large sums of money, or encumbrance of real estate rights, are involved, directing a lawyer to evaluate the contract may be prudent.
Keep your signed, dated copy of the agreement in a safe place. Use photocopies for reference or as working copies. Keep a log or blog of all the "he said, she said" details, so you'll be prepared if disputes arise. Take before and during pictures of everything for the same reason.
So What Can You Do? When things go sour, your options are determined by how strongly you can prove your point. A written contract with clear detail can be enforced by small claims court, or higher, if you can't resolve the disagreement yourselves, or through mediation. A verbal agreement can be pursued, especially if you have notes and witnesses, but persistence will be essential to achieve satisfactory resolution.
Instead, start out on the right foot with a detailed written agreement. After clarifying to yourself exactly what "a job well-done" would involve, put your ideas on paper. This list of "wants" and definitions of quality can form the foundation of an agreement.
When creating the agreement, or reading through a standard form provided by the other party, keep asking yourself how each term and condition could protect you if things go wrong. How would the wording constitute proof if you have to take the other party to formal mediation or to court. This may seem extreme, but, with the costs involved in renovations, real estate ventures, and other homeowner undertakings, this is the best way to protect your investment and minimize stress.
Standard forms and sample contracts are common on the internet. Many associations and consumer groups provide standard contracts or guidelines for creating agreements. Even if this is a small project, a written agreement will keep everyone on track.
If the other party is reluctant to put things in writing, make sure you understand why. What works for the other side, may not be in your best interests. Who's looking out for you?
Read each term and condition carefully to be sure you understand what you are agreeing to. Take what you read very literally. A contract says what it says, not what you or the other party think it says, or meant it to say.