Limit Your Liability with Customer Contracts

Published on June 28, 2022

Contract musts.

The first time I built a pond, I thought it was magnificent. I charged what I thought was a fair price. Unfortunately, it leaked. The water turned green. There was no skimmer box or waterfall box back then, so I had to improvise. I can’t tell you how many times I went back to work on that work of art. But now, when I look back at all the mistakes I made, my head hangs in shame, as I really did not know what I was doing.

Today, I get up every morning, drink coffee, work, do a good job and get paid. I have been in business since 1974. I have a very good reputation and, until more recently, have only had to hire one lawyer to handle my parents’ estate, as we had to go to probate to settle the loose ends. My father once told me that if you look a man in the eyes and shake his hands, you will have no problems with the job. There is no need to bill until the end of the job. Well, times have definitely changed.

Law & Disorder

PONDTrade Water Artisan of the Year Contest
In 2017, Act 808 came to be in the Arkansas legislature. It stated that any landscaper had to give notice that they would be sued if they did not pay for the work and materials provided. This means that any work done from any electrician, painter, plumber or whomever would be free of charge if the contractor did not make the client sign this piece of paper.

So, what is the easiest way to lose money? Find out that the legislature just passed a bill that states that if you don’t have the client sign a contract with certain language, they don’t owe you a dime. Grab a glass of water because this is going to be a dry read.

Case(s) in Point

Years back, I hired an attorney to represent me in a lawsuit brought by a customer who did not want to pay his bill. He hired a very expensive lawyer who knew the law. Unfortunately, I hired a wet-behind-the-ears, $250-per-hour lawyer who was referred to me by a $350-per-hour lawyer. I signed a contract with them stating that I’d use them for my representation. I was told not to talk to the client who brought the lawsuit.

Unfortunately, my lawyer, who was not privy to how lawyer tricks are played, hardly checked on my pending case. The presiding judge was a known acquaintance and referred the case to another judge, who did a summary judgement without us ever going to court. My lawyer had five days to appeal, starting the day the judgement was signed, which was on a Thursday. The following Wednesday, the case was dismissed, and I lost the suit. Essentially, my attorney was outplayed. I ended up paying for not only an entire landscape job and pond build, but also my attorney’s fees and the opposing attorney’s fees as well.

Then in 2019, I was contracted to install a pond for a wealthy client. I gave them a written estimate of the size and price. They gave me a verbal go-ahead to do the job. However, we were delayed because the utility marking company found a live cable running right through the pond area. I took it upon myself to call the cable provider several times to be assured they would move the cable, but no one showed up. Finally, I found out that only the homeowner could make the call. This took two weeks to find out and another week to have the cable moved. So far, payments from customer totaled $0.

I went to the job site and marked the outline of the pond again in white paint. The customer then stated they wanted the pond moved a little — about 4 feet from the house. So, I moved the outline and started digging. After getting the hole dug, it rained, then rained, then rained some more. We finally found an afternoon to go and pump out the pond and drop in the underlayment and liner. The customer came out and stated that we hadn’t moved the pond far enough, even though he had given us an exact distance to move it, and even after we had painted the area, and even after they had agreed to the location.
We had to install a block wall and move the pond back another 2 feet. As time moved on, the pond was enlarged to the customer’s revised specifications, thus including a larger pump, filter, UV light, more rock — and now plants had to be ordered and installed. They decided they wanted additional landscaping and lights, along with drainage around the perimeter.

Finally, six weeks after we broke ground, the customer’s wife came back from a two-week trip to Paris and was thrilled. She posted on Facebook that it was the dream of a lifetime, and my company had made it come true. I sent them a revised bill detailing all the items we put in the pond, along with the additions of a rock wall, lights, 200 yards of sod, 50 flats of mondo grass, several large expensive shrubs between the patio stone we installed, and all the other landscaping we did. So far, payments from customer totaled $0.

PONDTrade Water Artisan of the Year Contest
I heard nothing for five weeks until a FedEx envelope showed up with a letter from a law firm stating that I had not made the customer sign a form saying they should have to pay for the work I had done. In fact, the customers stated I’d done damage to their property, showing construction photos that I had personally taken during the build. Bear in mind, I had received no calls from the customer — no emails, no communications. Just a law firm letter stating that we had damaged their property.


The long and short of this is that between attorney’s fees and the loss of six weeks of labor and materials, I forfeited $55,000. What did I do wrong? I had shaken hands with this man and looked him in the eye. He seemed honest and lived in a half-million-dollar home. His well-known insurance agency had four locations. However, I didn’t have a contract in place that stipulated the payment process — a progressive pay schedule, what I would and would not do, and the consequences of him not paying me.

Lessons Learned

What did I learn from this? There are laws, but there is no justice. When you enter into halls of justice, you should find the most experienced lawyer you can and make him sign your contract to fully represent you. I promise you, he will bill you for every minute, every postage stamp and every phone call he makes. After all, good attorneys are worth the money. Cheap lawyers are where the good lawyer jokes come from.

So, what do I do now? First and foremost, I make clients sign a contract, including a provision that if they want any changes, there must be a signed change order. Do I do this on every job? If the price is less than $1,000, I might forgo it. But if I feel like they are not to be trusted, I do make them sign a contract and initial every paragraph. If they don’t sign, I’ve not lost anything but a little time.

I am willing to share my latest contract with anyone who wants a copy. This is tailored for Arkansas, but you can change the heading and any verbiage you desire to fit your state. Simply email me at mark@greenthumblr.com and put “contract” in subject line, and I’ll fire off a copy to you.

Kloubec Koi Farm

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