How do you approach the issue of contracts in your business? Do you always ensure that you sign a contract before providing your goods and or services? Do you feel confident to even suggest signing a contract especially when your clients are your friends and relatives. Or, do you take the approach of “I don’t need a contract, everything will be fine?”
If you have worked with me in the past, or if you know me personally, you will know that I am all about getting things in writing. And yet, even though one of the services that I offer my clients through my business support service is that of drafting and vetting contracts, I have to confess that I recently fell prey to one of the things that I tell my clients not to do – providing a service before signing the contract. As a result, I feel duty bound to write this article to highlight the dangers of providing a service in the absence of a written contract.
So in August 2016, one of my friends approached me to enquire about providing decorating services for one of their colleagues. The deadline was a bit tight since I was about to travel abroad, and would not be returning until a few days before the wedding date. During our subsequent telephone consultation, I told the prospective client that if she could get another venue planner while I was away, she should go ahead. But, if she was unable to do so and needed our services when I returned to the UK then I would be more than happy to provide the service.
So, we left it at that, and by the time I returned from holidays, there were exactly 4 days left before the wedding. She still hadn’t found anyone and so, against my better judgement, and always wanting to be “kind and helpful” I decided to take the job.
The request was to provide floral centre pieces for 30 tables, chair covers for over 250 chairs and to dress the cake table. At this point, the focus for me was to dive right in, sourcing materials to fulfil the job and then to iron out the contract afterwards – after all, we only had a few days to pull this off.
During the initial consultation, I stressed to the client how EXPENSIVE flowers were and hence, how expensive it would be to decorate her venue with flowers. (Check out this article on the true cost of wedding flowers by top florist Simon Nickell). We started negotiations for the centrepieces with a quote based on a rough estimate for a simple, low centre piece. However, on further discussions the request was for more elaborate, tall centre pieces which meant an increase in the prices quoted for initially. Suffice it to say that at this point, due to the short window in which the service had to be provided, both parties were operating on complete trust and confidence. My business partner questioned whether we should go along with the project, but not one to back down from a challenge, and knowing that the client would find it difficult to engage another venue planner with only a few days to go before the wedding, I forged ahead with the planning.
Confirming the details of the arrangement was a challenge, since by now, the client was rushed off her feet dealing with all her other vendors. I did manage to confirm some of the main aspects of our agreement with her in writing by email, text messages and telephone converations, but I didn’t get her to sign a contract before starting the service as I usually would. There simply wasn’t time to do so.
In terms of payment, my modus operandi is usually 50% in advance on a date to be agreed depending on the date of the event, and the balance one week before the event. However, taking into account that this was a referral and the fact that the client appeared “really nice, decent and reasonable”, I assumed that all would be well.
I received an advanced payment which mostly went towards the purchase of the flowers. Everything else was funded by us (floral equipment, chair covers and tiebacks, additional staff and delivery and setup) with the expectation that we would recover these costs on receipt of the balance which was anticipated on the day of the event.
My business partner and I worked really hard to provide a top quality service, going over and above the call of duty in order to source items and supplies in the colours and quantities that were required. Never did we imagine that there would be any reluctance on the client to pay us for our service, but that is exactly what happened.
On the day of the wedding, when we returned to take down the decorations, the bride announced that she had asked her sister to settle with the vendors and that this would be done during the coming week as opposed to on the day of the event as is customary.
The alarm bells still did not ring, until I rang on the Thursday after the wedding, having not heard from the bride’s sister, only to be told that the bride is requesting receipts for my services before final payment. I was flabbergasted – as I had sent her an itemised invoice setting out the cost of the service! It was then I realised that the absence of a contract must have given her the mistaken impression that this was not a business arrangement. After all, when I walk into a restaurant and order a meal, I don’t then ask the manager for receipts for the ingredients that he used in my meal, before settling the bill.
Suffice it to say that six months later, I still have not received payment for the total amount of the services provided to this client and it seems that there is a definite possibility that I might have to take her to court in order to receive the monies that are due to us.
So, What about contracts?
- Always get it in writing;
- Always structure your payment plans so that you receive the bulk of your money before the work is completed.
Watch out for details of our upcoming seminars and workshops on Contract Law for self employed and small business owners.
This article has been brought to you by Cay Moore, Owner of Cay Moore Associates and Creative Director at Cay Moore Events Management and Bloomin Beautiful Balloons and Blossoms
contact: Email: firstname.lastname@example.org Tel: 07957459136