# Contract cancellation



## Jimmy D

I have a couple customers who signed contracts with my company for roof replacement. I have spent at least 2 full days worth of time meating with adjusters, consulting with customers ect. not to mention fuel costs for driving to their homes for said meetings. These two customers are neighbors. After 2 weeks and 2 seperate contracts each(because they wanted specific materials) they now want to cancel, for no other reason other than a lesser price from a competitor. I have not had this happen before. I have been told I can take them to court to hold them to the contract or release them from the contract with a buyout. Between the two contracts it would have been close to 10k profit. I am a licensed, insured contractor and am unwilling to do all the legwork for a flybynite. I am courious how others would handle this situation?


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## RemStar

I would keep the deposit and let them out. In my area a buyers right to cancel is 14 days, and without a contigency contract you might be in a rough spot. 

Call them and tell them the position your in and try to work something out.


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## Jimmy D

I don't collect a deposit.


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## davidlc

*No Deposit is Bad Business!*

You should ALWAYS get a deposit with a signed contract and your contract should have a clear description of what are considered liquidate damages for breach of contract. Your are entitled to all of the profit you would have earned but no labor or materials. If you don't have a real contract I would suggest you have an attorney draw one up for you so this doesn't happen again. Good Luck.


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## vtroofing

Gosh without including a attorney in the mix any chance a snip at some of that wording? People are funny out there, and I think more often than not its "those" people not "us" people!


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## buildpinnacle

1. If Buyer/Owner choose to cancel this contract, all deposit amounts paid to Contractor are non-refundable after three business days from date deposit is received by contractor. Contractor agrees to accept such as a reasonable and just compensation for said cancellation.
2. This contract cannot be cancelled once materials are delivered, or work is commenced except by mutual written agreement of the parties. If material has to be reordered or restocked because of a cancellation by the customer there will be a RESTOCKING FEE equal to fifteen percent (15%) of the contract price.
3. All materials remain the property of the Contractor until installed per manufacturer’s specification. All excess materials upon completion of the work are the property of the Contractor.

Or something to that effect.


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## Ed the Roofer

You should just let them go. They will just waste more of your time and money that could be expended elsewhere for true valued profit and a satisfied customer.

If need be, send them a realistic bill for your time spent to procur the proper adjustment, but hiring a lawyer will take money that you will not get compensated for in return.

Live and learn, and Always collect a deposit.

Ed


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## vtroofing

Thanks Build Pinnacle. 
You too Ed.


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## Jimmy D

I would love to collect a down payment, however our area has been slammed with hail chasing scammers, and the news media has pounded into everyones head not to give any money until services have been rendered. We generally collect payment in full upon completion. That being said the contract is not only to protect the customer from me but also to protect me from the customer. As you all know the cost of business is very high these days, I can't afford to be used as free consultation. I fully intend to be compensated for my work.


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## Grumpy

This is why I say a contract is never a contract until the down payment check clears the bank. LOL you are going to spend $2,500 to sue them to recoup $1,00 gross profit? Just let them do and larn from your mistake.

I get down payments on any job over $1,000. 


LOL just one more reason I say storm work brings out the worst in people. People includes the home owners too.


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## charlotteroofers

Grumpy said:


> This is why I say a contract is never a contract until the down payment check clears the bank. LOL you are going to spend $2,500 to sue them to recoup $1,00 gross profit? Just let them do and larn from your mistake.
> 
> I get down payments on any job over $1,000.
> 
> 
> LOL just one more reason I say storm work brings out the worst in people. People includes the home owners too.


Grumpy is right just let them go. When you chase customers or have anger over a lost sale or a customer shafting you when you treated them right it only brings more of the same. I build a rapport with customers in the beginning and try to gain as much of their trust as I can= then I deliver everything I've promised in the time frame I've told them.

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## larryb

Jimmy D said:


> I have a couple customers who signed contracts with my company for roof replacement. I have spent at least 2 full days worth of time meating with adjusters, consulting with customers ect. not to mention fuel costs for driving to their homes for said meetings. These two customers are neighbors. After 2 weeks and 2 seperate contracts each(because they wanted specific materials) they now want to cancel, for no other reason other than a lesser price from a competitor. I have not had this happen before. I have been told I can take them to court to hold them to the contract or release them from the contract with a buyout. Between the two contracts it would have been close to 10k profit. I am a licensed, insured contractor and am unwilling to do all the legwork for a flybynite. I am courious how others would handle this situation?


Contracts or contigency agreements? 2 separate contracts (because they wanted specific materials?) - doesn't make any sense. "I have been told..." You didn't know that going in?

Might want to "warn" the HO's that, beside the potential fraud issues, the difference in what the ins co offers and the price a lowballer does the job for is a betterment to the cancelling HO's that, unless reported by them as 1099 MISC INCOME, might attract some unwanted attention from the IRS. 

"Dear John and Mary Homeowner, With the above in mind, are you certain you still want to breach this legal contract with my company?"

They want to play hardball? Then so will I. 

Had three over the past few years who where intitally very hostile towards me when confronted with the above after attempting to cancel contingency agreements but turned out to be three of my best references. They struck out and I hit a home run.

Same thing works for attorneys who advise their clients who attempt to cancel their contingency agreements that they "are not worth the paper they were printed on". My question to them is: "Dear attorney, your advice to my contracted customer that it is ok to cancel my legal contract with them is known as "tortious interference". It is likely that your name will also appear as a defendant on any legal action taken against my customers by my company as a result of their breach which was based upon your legal recommendations and advice. Is the spelling of your name and your law firm correct? Also, please provide me with your lawyer registration number". We'll be in touch.

Essentially the same applies to adjusters who refuse to talk with contractors. "You a licensed PA? No. Then I don't have to talk to you." "We're done talking, I will only talk to the insured". etc., etc.....

Once an insured signs a contingency agreement that clearly gives authorization to the contractor to neogiate, represent, advocate for/on behalf of, etc. no insurance company has a right to refuse to work with any contractor who, by that authorization, is acting as agent for the insured.

Then there's that "we don't pay O&P" nonsense. Insured paid for it going in (premiums), ins co pays for it going out (claims).

Me thinks there's an adjuster or two representing themselves as contractors as they troll through this and other forms...


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## kimboy

I would love to collect a down payment, however our area has been slammed with hail chasing scammers, and the news media has pounded into everyones head not to give any money until services have been rendered. We generally collect payment in full upon completion. That being said the contract is not only to protect the customer from me but also to protect me from the customer. As you all know the cost of business is very high these days, I can't afford to be used as free consultation. I fully intend to be compensated for my work.


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## [email protected]

We come across the same situation often,some posts i can agree with, about going thru all the trouble in spending time and money in the legal aspect. For the most part we just put on our selling hat and try to convince them why they should go with us as opposed to the "cheaper" competitor ( there are many points that could be made) and you will after time succeed in some, not all. If all fails match them, and suck it up even though for me its hard to get rid of that lump in my throat .What some of the people posting might not understand about the down payment issue, is that many of these contracts that we are having these issues with are ones were the customer just received the insurance check, and we as contractor/"insurance claim specialists" (which is just fancy for middle man in the roofing world) are barely trying to collect the first payment, or that is in many cases how we go about working with clients and the insurance. I like the points that one of the posters made about the attorneys interfering and adjusters refusing to talk to us at an adjuster meeting and they are good ways to try to convince the customer not to cancel the contract, but ultimately worse coming to worse you have to either match the competitor (or beat their price) to keep the customer and at least walk away with some profit, or pursue your legal options which number one is going to really upset them and two, whether they do or don't go with you, it will just cause problems during, and after you replace their roof. You will either have problems collecting the final payment or will have complaint's about the work no matter how good it was, and they will out of anger try to put a bad name of your company with the neighbors or family and friends.This is just coming to a realization that this is the world we live in and these people exist everywhere. In the end its better to swallow your pride and just make them happy, or at least try. There are customers that are just difficult period. I think that is one of the hardest things in this business that we have to deal with so many greedy and money hungry people willing to compromise the quality of their roofs and commit insurance fraud for a quick buck, all at the expense of honest guys like myself, just trying to make a living and put food on the table. In the end you have to decide to suck it up and take the deal on their terms, or loose a customer.That's just the way it is, that's sales for you.


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