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Technical Custom Build Contract?

Discussion in 'The Hokey Ass Message Board' started by adamshumard, Mar 31, 2014.

  1. adamshumard
    Joined: Jan 18, 2007
    Posts: 1,380

    adamshumard
    Member

    What do you guys use for a contract on custom builds? I want to cover my self by having an agreement in writing. I want to make sure I have all the correct info in the contract to keep me safe. Any recommendations on info that needs to be in the contract?


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  2. adamshumard
    Joined: Jan 18, 2007
    Posts: 1,380

    adamshumard
    Member

    A bump for the morning crowd.


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  3. I don't think there are many folks on the HAMB that paid someone else to build their custom. I could be wrong.
     
  4. jack_pine
    Joined: Jan 20, 2007
    Posts: 353

    jack_pine
    Member
    from Motor City

    I have done many show car builds in a prior life with an auto OEM. These were governed by contracts and purchase orders. I have learned a few things. Most shops won't (to be fair, many are too small and simply can't) agree to what I am about to list below. That might tell you something in and of itself.

    1. You can place all kinds of penalties in the contract but if the firm you are doing business with is not collectable; has no funds to pay penalties or fund additional work out of their own pocket.... no contract can correct that

    2. Many shops subcontract work. They may or may not tell you this. Be sure that you word the contract in such a way as to make them a contractor. They take responsibility for paying subcontractors. Since subs might decide to hold your car or parts for payment, be sure you account for that.

    3. Pay for performance. Break the project into phases. Pay at the end of a phase. If the shop needs money to begin, that is not always a bad sign. Materials cost money and many craftsmen don't have piles of money in the bank. You are loaning them money to get started. In this case, it changes the discussion about the cost of parts procured at the start of the job

    4. They have your car. If they are malicious or teetering on going out o business, be prepared with a way to get it back. I don't have a simple answer but keep your eyes open and don't be persuaded by verbal assurances.

    All these are the things a big company does to protect themselves. The builds I have done in my personal life have nothing like this to govern them. My personal cars have ended up in magazines, etc. Most times I have to fix what the builder did until I found somebody I trusted, which is priceless. You asked about contracts.....

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  5. denis4x4
    Joined: Apr 23, 2005
    Posts: 4,198

    denis4x4
    ALLIANCE MEMBER
    from Colorado

    I'm in my seventies and still can sign a check, but it's difficult to grip a wrench!

    That said, the last vehicle that I had built was carefully thought out and I got photos/videos every week along with a detailed bill showing labor and materials plus any outside vendor work that may have been done. We agreed that there would be a 10% commission on outside work that the builder paid for and we had agreed on the option to pay the outside vendor direct with no commission. I paid every week and we started with a four figure deposit that was credited back on the invoices over a set period of time.

    It's important to note that the builders I used were a father son team that I knew for a long time and had the utmost confidence in their abilities and integrity. A detailed contract was unnecessary in this situation. I also indicated that my ideas were NOT set in stone and I welcomed their input during the build. They contributed some ideas I never thought of, so it was a great working partnership.
     
    Last edited: Mar 31, 2014
  6. adamshumard
    Joined: Jan 18, 2007
    Posts: 1,380

    adamshumard
    Member

    I'm opening a shop, not having a car built.


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  7. High5
    Joined: Jul 2, 2012
    Posts: 185

    High5
    Member

    If you plan to farm any work out, I would make it clear in the contract that any and all changes have to pass through you. Have heard of instance's where the customer contacted the sub and asked to have something changed without informing the main shop "you".

    Deposit's at the beginning of work is common. Determine a percentage and note that in the contract. Make the deposit refundable only "if" no work has been started.

    Set a time payment plan for work that's done. Most shops will expect payment about every month to two months. If the customer is negligent, establish a grace period for working through the issue. If after that time period no resolution, all work will stop and legal action will begin. This is not fun but happens. A friend owns a classic car restoration shop and he brought legal action against a prominent Chevy dealership because the owners figured they could come up with excuses to delay payment.

    Describe in detail what your insurance covers and what is the responsibility of the customer for their car or truck.

    There are a lot of assumptions on the part of a customer. Make it very clear what they are paying for. Too many customers think they should be getting a $20K paint job finish for $10K or that a suspension upgrade should include this; that; or the other thing. Be specific! And show examples if you can.

    Best of luck in your new venture.
     
    Last edited: Mar 31, 2014
  8. ralphcramer
    Joined: Mar 23, 2006
    Posts: 36

    ralphcramer
    Member

    A friend did fab work on a 3 of my projects on the following basis ----

    He worked at least 8 hours per week on my stuff.
    I visited every week and paid cash for what he had done.
    I provided most of the parts, but if he bought any parts I paid cash each week (no markup)
    Because we met every week, we were always on the same page and there were no disappointments or late payments.

    The real beauty of this deal is that we both ended up happy and we're still friends.
     
  9. low51fan
    Joined: Nov 17, 2013
    Posts: 73

    low51fan
    Member

    I would agree with High 5. Spelling out everything on the front side should eliminate many issues down the road. Communication on a consistant basis with a clear understanding of the expectations from each of you is key.

    I would always lay out the dollar amounts of upcoming work to eliminate any guessing.

    If you want a contract on an agreement to pay etc. I would have an attorney draft one up which may be pretty cheap insurance.

    Seen some good guys get taken advantage of because of doing business by a handshake (just to clarify I still like doing business that way)
     

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