then somebody trips and falls in an open hole,” Ferguson says. “There are endless examples, but if we put that language in there, it helps the contractor; it helps their insurance company.” Another area to focus on is payment
terms and penalty provisions. Outline when payment is due and what interest rates a client will take on if they fail to pay on time. “I would like contractors to make sure they include that if they’re not paid on time, there’s interest penalties, and the right that if you have to proceed with any kind of collections you have an ave- nue to recover attorneys’ fees,” Ferguson says. Ferguson says if a landscape profes- sional doesn’t have those penalty pro- visions in their contract, and they have to file a lawsuit, they’ll likely only recoup about half their money due to the cost of litigation. Ferguson notes including a mandato-
ry arbitration clause can be much more cost-effective and quicker than filing a lawsuit. Murray and Nasim both say their contracts include this for disputes. “For us, it’s all about covering our bases and making sure we are protected,” Nasim says. Termination clauses should also be included in your contracts as they can provide an out for projects that cannot be resolved. You should also address how change
orders will be processed and if any price increases will be added after signing the contract. Murray says they added a mutual fairness clause that uses the De- partment of Labor’s Producer Price Index to calculate the rising costs that will im- pact the overall project expense. He says they’ve had projects increase by $10,000 to $20,000 due to inflation spikes. In Local Roots’ contracts, this clause
reads as follows: “Under this clause, the client understands that they will be responsible for any percentage increase in the total value of their project that is commensurate with the total increase by percentage in the PPI ‘Final Demand’ preliminary numbers from the month this contract is generated and signed by a Local Roots Representative till the month of the project completion. This percentage increase will be reflected in the completion payment.” Murray says they do not abuse this
clause, but it is there to protect them when the economy is shaky. “Especially in the unstable climate that
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we are in today, we have language about the price of fuel increases, or excessive and unforeseen labor and materials increases,” Nasim says. Lehr says some other clauses to consider, including the limitation of damages and non-disparagement terms that can prevent clients from making negative statements about your compa- ny on social media. Ferguson and Murray both rec-
ommend steering clear of including warranties in their contracts. Ferguson recommends that if you decide to include some type of warranty, focus on your workmanship, not the materials and limit the timeframe. “Use your integrity and your judgment
to just make it right for clients, but you don’t need to hold yourself to the con- tract,” Murray says. TE
steelgreenmfg.com (765) 481–2890 National Association of Landscape Professionals 29
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