Getting the Facts

We all run our businesses by certain core principles, often values we learned at an early age that carry over from childhood into our adult lives.

July 31, 2004

 

Kim Sweet

We all run our businesses by certain core principles, often values we learned at an early age that carry over from childhood into our adult lives. One of mine is this: "If your mama says she loves you, check it out." My mama didn't tell me that one; it came from an early mentor who used to run the copy desk at the Chicago Tribune.

The paranoid interpretation is: Trust no one. The proper interpretation is: A story lacking facts is worthless. If the writer doesn't detail the who, what, when, where, why and how, there is no usable information, and if the writer doesn't double check all those facts to be sure the names and numbers and places are accurate, the article might as well never have been published.

Remodeling contracts, it turns out, have a lot in common with magazine articles.

Recently, I found myself in the position of being a prospective remodeling client. I made a point of talking to contractors I didn't know as well as those I do to get the "full" experience. One guy - not part of a truck-and-ladder operation, either - responded to my questions about a contract with "yes, there's a piece of paper." He indicated that it would include the work to

be done, their time-and-materials hourly rate and the number of people on the job. I had to buy my own products. He also reassured me that if I wasn't happy with any aspect of their work, they would redo it until I was satisfied - within reason, of course.

Call me crazy, but I did not find this reassuring. He's not even my mom, and I'm supposed to hand over a large portion of my savings without having a detailed proposal that includes product specs and some written agreement between us as to what an acceptable drywall patch looks like? That does a disservice to me and to his remodeling company, exposing both of us to financial and legal risk. Our cover story, which looks at ways to manage construction risk to achieve quality results, offers some suggestions on checking out your contracts and filling in the blanks with accurate facts.

So, too, have a number of recent seminars I've attended. At the American Institute of Architects 2004 national convention, lawyer Martin A. Onorato and architect Chester A. Salit teamed up to discuss common contract risks and solutions, with the objectives of tightening all parties' responsibilities, minimizing client misunderstandings, protecting against unexpected scope creep and leveraging competitive advantages.

For example: Say the client wants to contract directly with the architect, the remodeling firm and other necessary parties (an engineer, possibly specialty contractors) to reduce construction management fees. Assuming you're OK with this, your contract might simply list the tasks for which other parties are responsible, with specific names attached when possible. Later, the homeowner comes back and wants you to help identify, choose and coordinate the services of all these other parties - big surprise, right? To avoid taking on extra work without pay, the speakers suggested adding a clause to the contract specifying that all of the above constitute a change order (which already should be clearly defined elsewhere).

Perhaps you've already learned this particular lesson through the school of hard knocks, which we all attend from time to time. But many professional associations for remodelers, architects and trade contractors offer contract seminars designed to help eliminate risk from the get-go. I also suggest reading Contracts and Liability, 5th edition, by David Jaffe and David Crump, or taking NAHB's Contracts & Law course, available on HousingZone.com under the Education link. Your contract should be worth more than the paper on which it's written.

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