Unforeseen Problems

Kevin75

Hi folks....does anyone have a clause in their contracts for unforeseen problems during a job? For instance, we recently did an addition and while digging the footers we encountered an 8'x8'x12' fresh water cistern under the old porch. The homeowner hadn't even known it was there. Anyway, I ran into another "issue" recently and the homeowner balked at paying any extra. She said I was contracted to finish the work. I busted my rear and hired an extra guy for 6 hours ($150 out of my pocket) to get the job done on time, but I left thinking I should have a clause to cover crap that is truly unforeseeable. Here's what I came up with:

If any problems are encountered which lead to unvoidable delays or an increase in work, and these problems were are unforeseeable prior to the commencement of work, the additional time will be billed at a rate of $1,000,000 per labor-hour.

Any thoughts or suggestions would be appreciated. I have submitted stuff like this to my lawyer in the past, but his prices approach $1 million per hour, so I'd like to avoid it here.

Thanks,

Kevin

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Proverbs 18:9 "One who is slack in his work is brother to one who destroys."

pcplumber

This is a statement in our contract.

"Expenses incurred on account of unusual or unanticipated underground conditions (e.g, fill, rock, ground water) shall be paid by the owner as extra work."

dubz

hahaha seems reasonable to me

DavidC

Assuming you have a well written proposal/contract specifying what you will do, I would think your change order clause should be sufficient. "Any alterations or deviations from the above specifications....."

If a client told me she paid for a finished contract I could point out just exactly what that included in the contract. I'm sure others have an unforseen clause, but this hasn't been an issue with us since we starting using our current contract. I have had to point out the specs on occassion, that seems to be enough.

Good Luck
Dave

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Mike Finley

YOu're on the right track but going in the wrong direction.

A hidden conditions, unforseen conditions clause should be in your contract, but that's not going to do much for you unless your customers don't care and are willing to just pay for anything you tell them they have to.

For example - with that blanket clause you could contract to build a deck and once you get started you complain that the soil is harder to dig in then you thought for the footers. You go to the customer and say, hey this isn't what I expected, this soil is harder to dig in then I thought, I'm going to need an extra $500.

You can imagine the customer could baulk at that. You could pull out your contract and point to your hidden conditions clause, but you're openned a can of worms now because you haven't defined what is normal in order to declare this as abnormal. Getting paid for that would not be guaranteed.

What I am saying, is you need that clause, along with others a matching materials disclaimer, a reusing existing materials clause and others but along with them you always have to declare the conditions that are expected in order for the unexpected conditions to be able to be defined by themselves.

In this example of building a deck you would have to define the expected conditions in your scope of work or contract that declares standard soil conditions first. Or most likely it is sometimes easier to declare what would constitute abnormal soil conditions. - rocks bigger then 1 foot wide, tree roots, clay, construction waste...

Kevin75

"Any alteration or deviation from above specifications involving extra costs will be executed only upon written change order, and will become an extra charge over and above the contract price."




That's my change order comment. I guess I see "unforeseeable" issues as being different. For instance, if you open up a wall and find non-standard construction that screws things up. The possibilities are pretty much endless. It's just impossible to know what you'll run into sometimes.



In the current case, we were doing an electrical upgrade. The plan was to pull the meter on day 1, and to replace the panel and inside wiring. Then on day 2 the elec. company was going to disconnect service, and we'd replace the meter box and mast. What happened was that the meter base was queer and when we pulled the meter, there were spring loaded contacts that kept the current flowing, even while the meter was out. From the outside, the box looked normal, albeit a bit old - probably about 60 years. As a result we weren't able to do the electric panel the first day, and had to hire a 3rd guy to help with the work on the second day. I ended up eating the cost. The only way to have known this was an issue, would have been to pull the meter when I quoted the job, but that would have involved removing the tag from the electric company and I don't typically do that until we've actually got a signed contract and are starting work. Not a huge problem to deal with, but I want to be proactive so there is a clear way to bill the client for the problems in the future.

__________________
Proverbs 18:9 "One who is slack in his work is brother to one who destroys."

Kevin75

Thanks for the useful comments Mike. I agree that a clause like this could be abused by an unethical contractor. The deck example is a good one. Sometimes it just boils down to having clients, and contractors, who trust one-another. In this case, I figured it was worth paying $150 for extra help, so that I could finish the job on schedule, and keep the client happy with the hope of getting repeat business.

I'm one of those guys who longs for the old "handshake" deals. Alas, my contract is 1 1/2 pages before I even start describing the work.

__________________
Proverbs 18:9 "One who is slack in his work is brother to one who destroys."

Kevin75

I have the following clauses:


-Payment schedule and collection process (for late payments)

-30-day withdrawal

- Warranty

- Mediation

- Binding Contract

- Change order



What do you use for those two, if you don't mind sharing? I usually have the client choose the materials from various options, so that if things don't match exactly it's on them.

My contract was reviewed by my lawyer, so I suppose it can't be too bad, but those two clauses look like they could be helpful.

Thanks,

Kevin

__________________
Proverbs 18:9 "One who is slack in his work is brother to one who destroys."

DavidC

Without a doubt I would have missed the meter socket detail because I've never seen or heard of one like that. But I do try to be as specific as possible when writing the specs, including disclaimers for possibilites I can rightfully suspect but not know.

I just wrote a proposal to tear out a kitchen carpet and replace with sheet goods. Included in the specs are removal and disposal, new underlayment and flooring. Also included is the disclaimer, "We may discover defects under the carpet that require repair or replacement and such repairs or replacement are not included in this proposal."

Sometimes specifying what you don't include is just as important as what you do. Again, others probably have better clause than what I use. I'm still seeking that magic point between too much and not enough.

Good Luck
Dave

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www.CookContractingLLC.com

DavidC

Here's ours on matching materials;

"After installing new window units, wherever feasible we will reuse the existing inside stop and other trims to maintain the original casework. In the event of breakage or missing pieces we will provide and install new inside and outside stops to match as closely as possible using locally available stock materials. In that event some variation is likely and is deemed acceptable."

That is from a replacement window proposal but can be used for most materials.

Depending on the job our proposals are 2-6 pages and attaches to our 8 page contract. I try not to exceed that and still include everything.

Good Luck
Dave

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www.CookContractingLLC.com

Kevin75

My uncle (about 62) used to be an electrician. When I told him about it he started chuckling and said he though he remembered seeing one like that when he was a kid!

After my discussion with Mrs. Homeowner Woman, I could have charged extra, but decided against it because I knew she was annoyed. Better to have a happy client for $150 than an unhappy one for $0. Hopefully it'll pay me back with referrals and or repeat business. Other than this one issue she was a very nice client to deal with.

__________________
Proverbs 18:9 "One who is slack in his work is brother to one who destroys."

dayexco

i know this is excavating contractor specific, but here's ours



State law requires us to call an 800# whenever we excavate. This service only applies to major utility company main line equipment and will not locate many of the things that may be buried on your property. We are only able to make a surface visual check for things that are commonly found on a typical property without charging for the time and services to do so.
The owner assumes responsibility for informing the contractor of all underground pipes, conduits, cables, wires, tanks, drainage systems and structures, and agrees to hold the contractor harmless in advent of loss or liability incurred as a result of incorrect or incomplete information provided to the contractor and agrees to indemnify contractor for loss or expense resulting from such incorrect or incomplete information.

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someday, i'll be as patient as Nick.

Brickie

Standard exclusions: Hidden, concealed and unforeseeable conditions. For the purpose of this contract, a hidden, concealed and unforeseeable condition shall mean a condition not readily observable to an experienced contractor or subcontractor inspecting the property for the purpose of estimating and performing the work specified within the contents of this contract.

Any alterations or deviation from the above specifications or any hidden, concealed and unforeseeable conditions involving extra cost of material or labor will be executed upon written order for same, and will become an extra charge over the sum mentioned in this contract

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dan-o

This is a problem I encounter constantly due to our doing lots of exterior rot repair. Spotting obvious rot is easy from the ground but you never know if adjoining trim is rotted or if sheathing behind the claps is shot too. Barring going over every inch of the house I quote them for what is obviously rotted with the understanding that there may be more. This typically works out but a couple customers were total a-holes and I'd left myself exposed.

For 09, I'm going to photo all houses and physically identify all 'included' replacement wood on my quote, both on the photo and with a written listing of each area to be addressed.

Kevin75

This looks to be excellent. Has it been lawyer approved?

__________________
Proverbs 18:9 "One who is slack in his work is brother to one who destroys."

rbsremodeling

I'd pull the word experienced out right before contractor

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Brickie

Yes, approved by and used on them as well. Keep in mind this is just a generic/starter version that I gave you, not a project specific one.

__________________
“Ron Paul is one of the outstanding leaders fighting for a stronger national defense. As a former Air Force officer, he knows well the needs of our armed forces, and he always puts them first. We need to keep him fighting for our country.” – Ronald Reagan