By: Joann Deutch, Attorney
What do you Need to Include in Your Contact?
Every contract needs to name all of the parties.
Every contract needs to describe which party has which responsibilities. It’s usually one side is doing work, and the other side is paying money for that work.
1. Each side needs to clearly spell out what they expect.
2. Your contract should include some language that creates a mechanism for changes. For example, in construction contracts, it is common to have a “Change Order”. A construction project will often change in scope. What I have never seen is when the parties agree that something will not be required, and the price of the contract will drop.
Has the Independent Contractor come up to you, and said: "You don’t want me to ...
Paint the ceiling too; or,
I can just drop the package at the door right? [the deal was to deliver it to particular person], or
Use my car to get to the job? –
Whenever an Independent Contractor approaches you with these questions, your answer needs to be “Yes”, or “What kind of price break do I get if I exclude that from the job?” You are being asked to revise the contract and accept diminished services, without a matching reduction in price.
Every contract needs to be explicit about by what date the services need to be completed. The flip side is by what date the contractor can expect payment.
Every contract should provide a mechanism for each side to say:
Every contract needs a decision about whether the dispute will be submitted to arbitration. If there is no mention, then arbitration is not required before a lawsuit can be filed.
- How many times can the Independent Contractor come back to the assignment to try and rework it to your satisfaction.
- What still needs to be finished for you to consider the job completed to your satisfaction. Remember - “to your satisfaction” also implies you will be reasonable. You can not refuse to pay because you’re being extraordinarily picky. If you want the right to be so picky, put it in the contract - attach pictures or examples… expect to pay more.
- I recommend you price into your contract damage calculations. This one is really tough. It could be lowest of 3 bids for completion. Both sides need to agree on 2 of the 3 bidders. Sometimes it’s not just the price of completing the job – the delay can cost you additional money – you need to communicate these expectations clear.
1. Do you want the arbitration to be binding?
2. Do you want to describe how the arbitrator will be selected?
3. Do you want to include provisions for attorneys’ fees? In most cases attorneys fees provisions are reciprocal which means - the losing side has to cough them up. If there is no provision, then usually each side pays its own attorneys fees.
Every contract should specify whether the Independent Contractor will work exclusively on your project.
Every contract needs to specify whether the Independent Contractor can employ subs.
Every contract needs to be signed by the person you want to hold responsible - not his cousin, her informal business partner, his wife. Every change to the contract needs to in writing and signed. A quick note is sufficient. It becomes a Business Record Exception to the Hearsay Rule, and is given consideration at trial.