Hi, Anthony from Contractors Debt Recovery back with this final episode in this second series of videos. So we’ve kept the best to last. I don’t know what award this one is going to win but we’re very hopeful it will win an award that hasn’t even been invented yet. I’ll be in a category of my own. Nevertheless, okay so what we’re going to talk about today is this phenomenon where you’re doing all this work and you haven’t got a contract. Now let’s walk through this. This line is the separator. So let’s look at the letter of intent. So sometimes on bigger jobs your client will say here’s a letter of intent, you start working but subject to a contract. You then start work on your letter of intent, you never get a contract. But the letter of intent says everything is subject to a contract. There’s a payment dispute and then your client says by the way here’s the contract.

Everyone here’s the contract and here are all the clauses you’re in breach of and that’s why I’m not paying you. You’ve never received the contract. You’ve seen it. But it hasn’t been sent to you. And now there’s an argument. Is the agreement the letter of intent or is the agreement the contract? Now that’s your fault because you didn’t insist on getting the contract there. Getting the contract, executing a contract, signing it. Alternately, you’ll provide a quote to your client and they’ll say great, start work subject to a contract. Same problem. Or, there’s no contract in which case contract is your quote but I’m talking about scenarios here where there is meant to be a signed contract. You’re putting in a tender response. Fantastic, start work or fantastic here’s a letter of intent, start work. Same problem. Maybe you go a step further. Maybe you’re working now for two weeks and finally two weeks or three months if you’re really silly, finally you have a contract and they say sign here. Come in and sign it.

You haven’t reviewed it which is a whole other talk but let’s say you’ve reviewed it. You sign the contract and you send it to them. Under the pretence that they will co-sign and they send it back to you. But they never do. So now you’ve signed a contract that you don’t even have. Now there’s a payment dispute. If you come to someone like me I’m going straight to the contract. Let’s understand the terms here. Haven’t got it. Don’t have it. You’re going in blind into the Security of Payment dispute because you just kept working. Now that is your fault. That’s very silly and you must insist on it. And in fact in my book, I don’t care what the industry norms are. I just don’t start. The contract is what binds you to your customer. If there’s no contract, there’s no reason for you to be there. I have an earth moving contractor. Ring me up and go, “Man I’m been on site for three days. I’ve done $20,000 worth of work.”

And I went through the discussion and I said did you quote? No. Just agreed, ballpark, oral. There was no tender response, no letter of intent. Have they issued you anything in writing? No. Have you agreed to anything in writing? No. Do you have a contract? They said there is one but they haven’t got it to me yet. So then I waited and then I asked this question. I said, “Michael, what is there in an instance in this universe that requires you to be on that site right now doing work? Absolutely nothing. Nothing. There was no agreement. There’s nothing. There’s absolutely no reason for him to be there doing any work. He said there’s nothing. So I said, “Well pick up your stuff and get out.” Which that is what he did. And you wouldn’t believe it. What a surprise a contract turned up four hours later. Would you believe it. I can’t believe it. Of course, I can believe it. All right that’s what you’ve got to be doing. Get the contract back.

I would even avoid the whole thing and say I’m not starting work until I have a signed contract. We’re coming into your office, you’re coming to mine. We’re signing this off. We signed off two copies. You keep one copy, I keep another. That’s it and I insist on that. And if you insist on it too you’ll get it. But be under no illusion that this is a deliberate strategy from clients. They quite deliberately keep the contract from you. They quite deliberately don’t return it to you. They quite deliberately send you a blank contract so they have plausible deniability. Well we never signed it. We send it to you but we never signed it, etc. Co-signed contract that you have a copy of. That’s the golden goose that you want to aim for. A signed contract, both people have signed, both have dated and I’ve got my copy and I’ve got that copy before I’ve done work. Don’t be doing work two or three weeks, three months into work and you haven’t got a contract. I’ve had people come to me nine months into a job with no contract. That is absurd. You shouldn’t be doing it. It’s totally your fault. Just put your foot down and get that contract.

And if your client ums and ahs just stop work cause I can also see trouble down the road and so can you. So the last message in this series is if there is contract on the horizon or there is an intention that this is going to happen, make sure you have your signed copy and make sure at least in my books that you’re not starting any significant work until you’ve got it. Cause your client have got it. They’re just trying to get you going, get you deep enough in the amount of money you’re owed so that they can then say well we’re not giving you the contract and then you stop. If you got any queries or questions the number is at the bottom of the screen give us a call. Other than that I hope to see you in a third video series. Other than that have a broader look around our website. Go to the webstore. There’s lot of good information, good booklets, good stuff you can buy to help your business run better and I will see you next time. Cheers.