Cancellation Fee?

[Sunrise Guy]

I have just updated my bid sheets with this:

Once this proposal sheet is signed, it shall constitute a contract for services. A $200 cancellation fee will be charged by Sunrise Tree Services if contract is broken by individual signing below. By your signature below, you agree to pay this fee within ten days from the date of your breaking this contract.

I am wondering how many of you have a clause like this on your bid sheet. I have never had a client cancel a signed bid, but I had a close call the other week. That is what got me to include this new line.

 

[John Paul Sanborn]

I've used something like that with ernest money, stating that they have the right to cancel until we show to do the job. If they cancel with us onsite, or the job is performed by another company then the ernest money is forfeit for the payroll and logistical cost of showing up for the job. Get legal councel
on any of these contract phrases.

Also, before accepting ernest money, or down-payment, one needs to understand the local and state law regarding it. In WI the contractor can face triple damages if the job is not finished in a timely manner.

 

[lxt]

I know the state of PA. requires that you give the contractee the ability to cancel within 72 hours after they have signed the contract. this rule might be federal not sure, but is enforced in PA.

Id check with an attorney in your state, some states only allow you to re-coup/charge for withdrawal so much! each state differs.

good luck.

LXT............

 

[pbtree]

The best advice here is...

Check with an attorney. You just might be creating a beast that will come up and biter your arse when you least expect it...

 

[okietreedude1]

I have a line stating 'a 10% deposit is / is not due upon acceptance.'

I then cross out which ever is appropriate. If I feel the job will be cancelled ill take the deposit. Ive not done it yet but a couple times i should have. One time i did have a guy have someone else do the work after he gave me the go ahead. I showed to work and it was done. I sent him a bill for $35 cancellation w/o notification. I was expecting a nasty phone call and got a check instead.

 

[SilentElk]

What about a smaller job you are doign for $150? If I was the homeowner and cancelled I sure am not going to pay more than if I had the job done.

In my experience, the more smaller price showing fees the less the customer will like it. Most wont read or care but numbers show up like a sore thumb in fine print. I would change to say something closer to something such as:

Once this proposal sheet is signed, it shall constitute a contract for services. A rescheduling, and possibly mobilization, fee will be charged by Sunrise Tree Services if contract is broken by individual signing below. By your signature below, you agree to pay this fee within ten days from the date of your breaking this contract.

Sure you can say $200 if you want but show the fee is for causing some undesirable circumstance such as having to reschedule things to accommadate your loss of work and/or mobilization if you show up and the work is done.

Although there is time to print something like this, it seems to have a tendency to come back. For example, if you dont get the job done on time will they want a $200 fee for failure to complete on time? I kept small print to minimum. Basically stating when payment is to be recieving, late fees (nobody cares because ever small print in the world has late fees), how work t be performed, and several other general clauses of overall work standards, appearance and workmanship.

If you think stating a $200 fee for cancellation wont deter any clients then put it in. A client cancelling is a shame and does occasionally happen.

 

[John464]

If someone cancels I say "goodluck and I hope it all works out for you". I will not take money from someone that I did not do work for. Sure I could legally penalize them for breach of contract, but I don't find it in my heart to do so. I have had people cancel because they got a cheaper price or thought they could cut corners by going to someone else. If I had taken a non refundable deposit, I would not get that call back from them apologizing for not sticking with us and that they are sorry and would like us to come do it. I then charge a premium on top of my original estimate for having to fix someone else's mistakes.

I tend to keep more customers this way. Taking a few hundred dollar deposit is not worth me having an angry mouth in my area, which will cost me more than that little deposit.




Yes if someone cancels that morning it does piss me off, however, I always have another job that can take it's place.

NOTE: customers do cancel because of sudden illness or death in the family and if you all are going to take a few hundred bucks from them you are unethical

 

[Tree Slayer]

If someone cancels I say "goodluck and I hope it all works out for you". I will not take money from someone that I did not do work for. Sure I could legally penalize them for breach of contract, but I don't find it in my heart to do so. I have had people cancel because they got a cheaper price or thought they could cut corners by going to someone else. If I had taken a non refundable deposit, I would not get that call back from them apologizing for not sticking with us and that they are sorry and would like us to come do it. I then charge a premium on top of my original estimate for having to fix someone else's mistakes.

I tend to keep more customers this way. Taking a few hundred dollar deposit is not worth me having an angry mouth in my area, which will cost me more than that little deposit.




Yes if someone cancels that morning it does piss me off, however, I always have another job that can take it's place.

NOTE: customers do cancel because of sudden illness or death in the family and if you all are going to take a few hundred bucks from them you are unethical

I agree 100% don't sweet the small stuff .If someone cancels on us it's usually a cheaper price or they found out the next door kid or an uncle or who no's does tree work. But if you charge them that 200 you probably will never get a call back from them the neighbors or anyone they no and in some cases that could be alot.

 

[John Paul Sanborn]

customers do cancel because of sudden illness or death in the family and if you all are going to take a few hundred bucks from them you are unethical

To true, and if they gave timely notice, then you may loose in court if they want it back.

The only time I've ever kept ernest money is when I rolled up on a completed job that took a lot of planning and manpower. You do the diggers hotline, schedule power disconnect, roll up with 3 trucks, 5 people and the tree is gone.

Even with $200 you have lost money for the day.

I agree that keeping money just because the client called and said not to do the work is unconscionable. If it is not a price issue, then tell them you will keep in touch and do it when they can work it in.

 

[ASD]

For us it depends on the size of the job. We do not take deposits on jobs under $10,000 (in CA. you can only take $1000 or 10% what ever is less)

But because of the size of some of the projects we get involved with we will hold the client responsible for the time slot they booked if we can't fill it.

Because if we were set to start a 6 week job on Monday and they call Friday and say we need to hold off for a couple of weeks their pore planing dose not
relive them from the fact that the booked the time slot !

 

[John464]

ASD,

you are right. residential work and commercial/municipal are two different ball games. My above comments were geared towards the residential customer. If a residential job cancels it may mean something happened with their family.

On a commercial account if something even happens with head of the department the next in line makes sure their business keeps rolling. I have never in 47yrs of business have had any commercial account cancel on us(delay yes but not cancel), most businesses know that once you sign a contract they are by law to adhere to the guidelines of the contract and will not risk the penalties after a contract is signed and dated.

You do not have to put a cancellation clause on commercial accounts according to my attorney. A legally binding contract within itself represents finalization upon the said agreement.