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Old 02-24-2008, 12:53 AM
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There has been quite a bit of discussion here lately on the subject of lawn care contracts. *Since it is the time of year for contracts and getting new customers, I want to take a few minutes to share my thoughts on this subject. *

My writings ARE NOT legal advice by any means. *They are just my opinion based on being associated with the lawn care industry since 1992.


Definition of a contract: *

In my college business law classes, I was taught a contract is composed of three criteria: *
1) Offer *2) *Acceptance *3) *Consideration. *Consideration comes from the fact that the offer and the acceptance are reasonable in the eyes of the law.


When you say *"Mrs. Jones, I will do your lawn for $35." *That is an offer.
When she says "Yes, I will pay you $35 to mow my lawn." *That is an acceptance.

The above discourse, at the moment of acceptance (given reasonable consideration), forms a verbal contract.

Need for a written contract:

The detail of a contract depends on the level of protection you want to be afforded by that contract. *

Do you really need a 12 page legal document drawn up by a legal team just to do a $35 lawn? *
Probably not.

Do you need an extensive written contract detailing all duties and eventualities for a 3 year, $500,000 right-of-way mowing contract? *
Probably so.


It has been my personal experience that if you are doing a $35/week residential yard it is not necessary to have a written contract. *

Why might you NOT need a written contract?

1) Customer relationship. *Lawn care is a relationship business. *People want to do business with people they trust. *I have found the vast majority of lawn care customers are honest and willing to have a good relationship without need of a written contract.

2) Lack of significant damages. *If you have a contract with a $35/week customer and that customer decides to breach his end of the deal, how much are you really damaged? *If you pursue this customer you will waste hours and days of time trying to collect $35/week instead of simply finding a different $35/week customer who willingly pays you for your work.


Why might you NEED a written contract?

1) *If you will be damaged significantly due to breach of contract. *

Example A: if a customer calls you in November for leaf cleanup and promises to hire you next summer to cut the grass. *You are doing one of the more difficult jobs of lawn care (leaf cleanup) with the expectation that income will be produced throughout the following year. *If you are not hired to cut the grass next season, you might be unreasonably damaged by loss of income.

Example B: *if you are hired to mow a very large area of property for which you need to purchase additional equipment, hire additional employees, and/or set aside other customers in order to do this work. *If any of these (or other conditions) apply and the new customer breaches his end of the bargain, you might be damaged from the loss of income.


2) *To protect the customer against higher costs.

Example A: *If a lawn care operator provides full service lawn care including end-of-season fertilizing, aerating, and overseeding, the LCO needs to order supplies based on expected demand. *If he has 20 customers each needing 80 lb. of 10-10-10 fertilizer, he can bulk order to reduce costs. *Let's say it is November and the LCO only has enough fertilizer to service those 20 customers. *If a 21st customer steps in and want a fertilizer job, the LCO will have to charge much more for the one-time service. *However, if the customer had signed a contract for 1 year's worth of total lawn care beginning the previous April, he could have received a greatly reduced price on the fertilizer job.

Example B: *If a customer wants his grass cut "no less than every two weeks and/or when the grass reaches 5 inches in height." *In this example, the customer wants to know an upper limit to his payout. *If it is a dry summer, the LCO might only have to mow every 14 days. *However, if it is a wet summer the grass might need to be cut more often than 1 time per week. * The customer is protected agains an unusually rapid growing season while the LCO hopes it doesn't rain at all.


These are just a few opinions off the top of my head. *


Let me hear your thoughts:

Keith
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