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June 9, 2021

Why email trumps text in the trade industry. A must-read if you’re just starting up and still learning the ropes around legalities, contracts, and agreements.

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Why email trumps text in the trade industry

A must-read if you’re just starting up and still learning the ropes around legalities, contracts, and agreements. 

Do I have a story for you! (Without naming names, or giving too much information away.) When we were first starting out, we quoted a project which was accepted, however, we didn’t have an industry contract in place. We provided them with a client agreement, which listed our terms of service, but aside from the quote there was nothing else stating the scope of work. Back then we liked to think we had a good judge of character and decided a hand shake would do it — this couple was nice enough — or so we thought. 

The project started small, but over the space of a few weeks, they requested significant additions. When the clients refused to pay us the tens of thousands of dollars they owed us, we had no choice but to approach a lawyer. She wanted all of the email correspondence with the clients but NOT to bother with text message records. She explained that emails hold up in court, and if we had any chance of getting our money from them she had to see their acceptance of all of the changes in an email at the very least. 

This was fundamental business school. Lesson number one: have all variations, at the very least, emailed to the client and request a written acceptance via email. Ideally, have a variation form signed and returned, clearly stating the cost, scope, and expected delay. Lesson number two: always have a contract clearly outlining all the things! 

It was a very expensive lesson on the legal side of running our construction business. From that moment on, we reverse engineered our process, working backwards from us ending up in court with our clients. It sounds rough doesn’t it? It was. It’s not a natural way to operate, and it definitely goes against my own values of seeing the good in people. But business is business, and for this reason, this is how we operate now. 

Tradies are often left exposed when a project’s value falls under $10,000. You have standard industry contracts that start at ten thousand, but what about the smaller jobs? Smaller jobs are many tradies’ bread and butter; they do hundreds of them a year. In Victoria, Consumer Affairs state that by law you must have a written ‘major domestic building contract’ for work worth more than $10,000. This includes “erecting or constructing a home and associated landscaping, paving, retaining structures, driveways, fencing, lighting, heating, air conditioning, water supply or sewerage.”There are subcontract agreements that are available for builders to use with their subbies, but what about tradie to client? 

We ended up having our lawyer write out a service agreement for us to cover those smaller projects that left us vulnerable without a contract. It has all of the details of the scope of works, parties details, duration of the project, what to do if someone was unhappy, payment terms and a tone of expectations. We also used the agreement as a permission slip to get signed consent to take photos for marketing services given we used progress photos of our projects to inspire future clients. Want a copy of my photo consent form? ( Click here )

We took the advice of our lawyer to have any variations to this agreement proposed to the client and signed off on before any of the work commenced. This process is often frustrating for tradies because it can often stop the flow of a project, it’s counterintuitive to stop working for admin when all of the tradies are there onsite to do the work. The sad reality is, this is just the way it has to be. Without signed consent and acceptance of a variation to the scope you’re leaving yourself vulnerable to refusal of payment because the client is within their right to say they didn’t accept it. You can avoid this by having the variation accepted via email, but signed consent is king, and will hold up in court.

If you’re one of the ones who is exposed without anything in place (like we were), do yourself a favour and chat with a contracts lawyer. We found my service with Foundd Legal to be of a very high standard, we got exactly what needed. This has given us so much confidence in our construction business. If you would like to have a chat with Foundd, they offer a free 15-minute discovery consult, I’d recommend booking a chat with one of their lawyers to discuss your unique situation. I found it really refreshing that I didn’t need to know it all, they are the experts and they work their magic in a legally legit way. Schedule a call via this link.

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I’m Holly, the coastal mum from Behind the Tools.

I’m here to guide builders and their partner’s entrepreneurial minds in the art of transforming overwhelming business management into simple profitable solutions.

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