ACT Contractors Forms... From The Paper Side of Contracting.

Independent Contractor Agreement, is your Sales Force independent?

Posted by Bill Baird on Thu, Oct 8, 2009 @ 23:10 PM

independent contractor I got a call today from a Texas roofer looking for an independent contractor agreement for his sales force. For those of you who have never "run" salespeople in your contracting business, let me explain why this is important.


  • First...An independent salesperson is their own boss and their own "company" so they are responsible for all the things that your employees require. Taxes, benefits, medical, disability, workers compensation, vehicle expenses are all ON THEM!

  • Second...Since they are independents, you don't have to supervise them the way you do your employees. This is especially useful if you operate in a large area.  When you get a lead in a far away place, you can simply call your independent salesperson in that area to make the sales call.

  • Third... Independent salespersons are usually compensated on a commission basis only.  There is no greater motivator for them to sell the leads you give them!


     So you can see why most construction companies particularly those that do home improvement, prefer independent salespeople rather than employee salespeople.


     The problem lies in making sure that your salespeople REALLY ARE Independent! It is not nearly enough to have an "ironclad" independent contractors agreement with them. The way you TREAT your salespeople and the control you place over them has as much, if not more, to do with their status as an independent contractor.


Here are a few considerations to take into account that I learned the hard way, first hand "in the trenches":


     The Government whether it is the IRS, State Tax board, courts or labor commissioner will NOT consider a salesperson independent and will consider them an employee if:


  1. YOU SET THEIR LEAD APPOINTMENTS even if they ask you to! You are controlling their time and that makes them an employee.

  2. YOU PLACE LIMITS ON WHO THEY CAN WORK FOR! If you tell them they cannot sell the same product or service as yours for another company at the same time, you are controlling their business and that makes them an employee!

  3. YOU DEMAND THAT ANY LEADS THEY GENERATE FOR YOUR PRODUCT OR SERVICE IS YOUR PROPERTY ONLY!  You are telling them any business they generate is yours alone and that makes them an employee!

     It is important to word your independent contractor agreement very carefully so your sales force is truly independent. But don't forget, how you treat your sales people and the controls you place upon them are just as important!  Make a mistake here and you may be paying much more than a commission to your so-called "Independent Contractors"!


Questions or comments about this topic?  How do you keep your sales force independent? Please comment below.


Topics: home improvement contract, contractor forms, independent contractor agreement, texas roofer

Your Contractor Forms should help you sell more jobs!

Posted by Bill Baird on Wed, Oct 7, 2009 @ 21:10 PM


       Every contractor knows they need a good contractHome Improvement Contract- trust. form to protect their interests and to keep them in compliance with federal and state laws. But what about the impression the forms you use leave with your customer? Here are a few things to consider:


Can your customer understand your bid?


     If you're using a combined proposal/contract, is it really the best way to present your bid? Would a bid form without the "legalese" make your offer easier for the customer to choose you over the "other guy"?  It seems to me that in any bid, the customer wants to know the benefits and value of choosing you to do their work and if you have more benefits and value than the other bids, you'll get the job. Why introduce legal boilerplate into the situation at this point to confuse and "turn off" the customer. After they agree to your bid, a separate contract form can be used to cover the legal requirements of the transaction. Since they have already committed to you by accepting your bid, getting the contract signed is a "slam-dunk"!


Do your contractor forms allow you to include pictures in an easy way?


     One picture is worth a thousand words. An old addage but very true. We humans are visual creatures. If you can tell your story to the customer in a visual way, by pictures or photos, your customer will like you better than someone else who forces them to get the information by reading. Some things must be viewed and cannot be described. Find an easy way to include pictures in your bid and sell more jobs!


How LONG is your contract? Does it scare you?  Think of what it's doing to your customers!


Contractors forms for bidding on a computerIs the length of your contract appropriate for the work you are doing? A contract "book" that is pages and pages long is appropriate for large, complicated jobs. If you are doing most home improvement, 4, 5, 10 and 20 page contracts are not only unnecessary, but would frighten the hel* out of me.  That's longer than the contract I signed to buy my WHOLE HOUSE! Page after page of contract says "LAWYER" to me and I, like most others, cringe at the word! Don't justify using an intimidating, overly long contract to yourself because you downloaded them for cheap on the internet in word format which, incidentally, was never designed to make forms, from somebody who hasn't a clue how to make a form in the first place... there are better contractor forms out there to use with your computer... hint, hint!


Let the customer trust you!


     Would you like to do business with a winner or a loser? Do you want someone who is trustworthy and businesslike working on your property, someone that you know can get the job done right?  How do you show a potential customer that YOU are trustworthy and can get the job done?  Easy, by giving them a list, with PHOTOS, of completed jobs you have done. Nothing says you can trust me and I am competent like a documented track record of beautiful (photos again), completed jobs.


Help Them Trust You even more. Give them a copy of your warranty as part of your bid!


There are so many rip-off contractors out there that every customer is wary. You know, the guys that get paid up front and then are no where to be found! Give the customer the sense that you will be around for them before, during and AFTER the contract is signed and the work is done. How? Give them an extraordinary warranty and give it WITH THE BID. Give the warranty after the job is done like most contractors do and it works for the customer. Give the warranty before the job is done and as part of your bid and it still works for the customer but it also works FOR YOU!


Do you believe that the right form can help you sell the bids you go on? Are we wrong... in your experience?  Please comment below.

Topics: contractor forms, contractor bids, contractor contracts, MS Word forms, warranties, how to bid

Contractor Forms MUST include the 3-day Right to Cancel Home Improvement Contracts

Posted by Bill Baird on Tue, Oct 6, 2009 @ 23:10 PM

     Your contractor forms must take into account the federal contractor cancelling an agreementand state laws regarding the 3-day cancellation rights of the consumer. Known by many names such as  the "3-day cooling off period", "3-day right of rescission" or "3-day right to cancel", this requirement causes a lot of confusion among contractors. If you do home improvement work, your home improvement contract must comply with this consumer right. 

     DID YOU KNOW that it doesn't matter what state you live in, the Federal Government has ruled that ANY Home Improvement Contract signed in your customer's home must give the customer the right to cancel the contract within 3 business days after they sign FOR ANY REASON. This applies to any job whose value is $25 or more.


     DID YOU KNOW that a customer who is entitled to the rights offered by the 3-day cancellation rule and who is not properly notified of these rights has THE RIGHT TO CANCEL the contract ANYTIME until 3 business days after they receive proper notification of this right???

So... You work on the job for a week. The customer wanted to cancel the contract the day after they signed but because you did not notify them that they can, they didn't think they could.  A friend tells them about the 3-day right to cancel. They call their attorney and ask him about their rights. He explains their cancellation rights and because your contract does not include the proper notifications, tells them to go ahead and cancel NOW! You have one of two choices.

  • TRY and sue them for the money they owe you for the completed work, lose, then eat all your expenses and costs on the job PLUS PAY YOUR ATTORNEY FEES, PLUS you will probably PAY THEIR ATTORNEY FEES!

It is important to understand that the FEDERAL rule regarding the 3-day right to cancel is the MINIMUM rule that every state MUST follow.  Each state can ADD to the minimum federal rule to give even more rights to the consumer... and most states DO!

If you would like to know more about whether this cancellation rule applies to your business and about further requirements of this rule, please click on the following link to download our FREE white paper on the 3-day cancellation rule.




Topics: home improvement contract, 3 day right to cancel, home improvement, 3 day cooling off period, 3 day recission period, notice of cancellation form

Pennsylvania's Home Improvement Consumer Protection Act (PA HICPA) will help.

Posted by Bill Baird on Mon, Oct 5, 2009 @ 22:10 PM

Pennsylvania Contractors, welcome to contractor regislation and the state laws that go along with it! This is a bad thing... right? . . .  WRONG! In every state where contractor registration and/or licensing has been written into law, suprising things have occured:

  1. Those "unfair competitors" who operate outside the rules and because of this are able to offer cheaper prices, will start to be "weeded out".
  2. Overall job quality will go up as these unlawful, fringe contractors can no longer do business.
  3. Consumers repect your industry more because you are now all registered professionals... sounds corny but is true!
  4. You will be able to get more for your work as the "playing field" is leveled and prices stabilize.

As of July 1, 2009, ALL home improvement contractors in PA must be registered and must have contracts and other paperwork that comply with the many requirements set forth in the new PA Home Improvement Consumer Protection ACT (PA HICPA) for all jobs over $500.

PA Home Improvement Contractors will now have to provide the homeowner a written contract that meets all of the requirements of the new laws. If the contract forms you use do not meet these new requirements, PA courts will view the contract as invalid and unenforceable. What does this mean?

Simply stated, if you want to protect your legal rights and remedies to get paid for the work you do, you MUST have a contract that complies with the PA HICPA!

Free PA Home Improvement Consumer Protection ACT Information for Pennsylvania Home Improvement ContractorsThis is no joke! PA Contractors!

I have put together an informational pamphlet that will tell you everything you need to know about the new PA contractor requirements including whether you need to register and if so how and what the new laws mean for your business.


to download a copy of this PA HICPA pamphlet FREE....CLICK HERE!


Topics: PA home improvement contract, PAHICPA, PA Home Improvement Laws

California Contractors forms must not show "bonded" and/or "insured"!

Posted by Bill Baird on Mon, Sep 28, 2009 @ 16:09 PM

California contractors forms cannot have insured or bonded on them.       I received a bid for a new roof on my house last week here in California.  At the top of his roofing bid form and at the bottom of the advertisement from him that I responded to, this very large roofing contractor proudly displayed "bonded and insured".

Behold... two common mistakes have just been made that we find regularly from California Contractors who purchase our contractors forms. 


California Contractors Law (section 7027.4 of the CA B&P) prohibits including any reference to the contractor being "bonded" in any advertisement, or on any company "paperwork" that could reasonable be considered "advertising", if the bond being refered to is the standard license bond that all California Licensed Contractors must have. Simply stated, unless you have a "special" bond other that the license bond, you are not allowed to mention that you are bonded!

Contractor bid forms or estimate forms, proposals, bid proposals, door hangers, letterheads and most of the other paperwork CA contractors use between themselves and their customers might well be considered an "advertisement" in many cases so it is best to leave the word "bonded" off these as well.

A CSLB disciplinary bond is not a "special" bond!

If you are required to carry a bond, in addition to the standard license bond, as a result of a CSLB disciplinary action against you, the same section of CA Contractors Law also prohibits you from advertising this bond! You have to wonder why any contractor would WANT to tell people about their disciplinary bond, you know the one they got from doing something WRONG, but apparently some do.


A few years ago, California added to the law, (section 7027.4) that has been in place for years, making the word "bonded" a no-no in advertising. These "new" laws state a CA licensed contractor can no longer advertise that they are "insured" unless they state what type of insurance it is! 

So, any reference to "insured" in your company ads and forms must, for example, be stated as "commercial general liability insurance" or "worker's compensation insurance" or better yet "We carry Commercial General Liability and Worker's Compensation Insurance for your protection!"

Silly mistakes like this can get you into trouble with CSLB and if included on your California contractors forms, can interfere with your legal rights as a contractor!


Questions or Comments?  Don't be shy! Comment below.

Topics: california contractor law, CSLB laws, roofing contractor forms

Painting Contracts & Accepting Credit Cards go together hand in hand.

Posted by Bill Baird on Tue, Sep 15, 2009 @ 00:09 AM

Accepting credit cards in your painting contractor business is just one more way to separate your business from the other guys. Accepting credit cards in your construction business will improve your bottom line!Credit Card acceptance will bring in customers that you would never see otherwise! Just showing those Visa-MasterCard symbols on your painting bid forms and on your advertising like door hangers will make a huge difference to your bottom line. This is fact, not conjecture.

Studies show, for example, that a person going through yellow page ads looking for a plumber or other construction professional, will always prefer those with Visa-MasterCard symbols over those that have none. And this includes people looking that DO NOT EVEN HAVE a credit card to use!

Being a credit card merchant gives you a professional image and adds stability and credibility to your painting contractor business like nothing else! Credit cards are so commonly used that people are distrustful of companies that do NOT accept them.  To the customer, it is not WHY the company does not CHOOSE to accept credit cards, it is what is WRONG with the company that CANNOT ACCEPT credit cards. 

Skeptical? Try it. Credit card merchant accounts are easier than ever to get. Worried about the percentage credit card companies take out? Consider it a cost of doing business and forget about it. Think of all the jobs you might have left behind by NOT offering your customers the option of paying by credit card. The 2-3% or so these companies charge will be more than offset by the extra work you will get.

Consider these benefits credit card acceptance brings to the painting contractor:

  • No more, or at least, fewer trips to the bank. Everything is done automatically.
  • Most people find it easier to pay for anything when using a credit card, after all its not money, its plastic! Even if you are not the low bid, the convenience to the customer of credit cards can give you the job!
  • Customers can pay OVER THE PHONE for progress payments.
  • The "check's in the mail" is never an issue.
  • Never have to deal with "bounced" checks.
  • Customers appreciate benefits to them like credit card incentives, air miles, "extras", or rebates.
  • Customers can "extend" their budget and have more done by you because of the credit card.
  • Customers can have work done without having the "cash" and you will be doing it because you offer credit cards.
  • Commercial customers can pay quicker with credit cards. They do not have to submit paperwork to the "powers that be" to get a check cut for you.

Let your customers extend their construction budget by using plastic money.You should accept credit cards in your construction business because that is the way people like to pay!

Make it easier for your customers to pay, not more difficult. The fact is, you'll NEVER know just how much work you've been missing until you start accepting credit cards in your construction business!

Do you have experiences, questions or ideas concerning using credit cards as a marketing tool for contractors? Please comment below!

Topics: painting contractor, construction marketing, credit card

Contractors Forms All have to Work Together!

Posted by Bill Baird on Wed, Sep 9, 2009 @ 00:09 AM

Contractor Forms must work together. 

Every contractor form that your construction company uses must work with one another. A common mistake is failing to provide for the forms you wish to use, in the construction contract or the home improvement contract. You can't pull a construction form "out of thin air" and expect that the recipient is bound to comply or agree to it's content.

  • For example, if you want to use a change order, the agreement between the parties must have a properly written provision in it providing for any changes. Without this, the other party to the construction agreement can refuse the change order outright!
  • If a general contractor wishes to use construction management forms like a subcontractors Notice to Perform or a subcontractors Back Charge Notice, there better be a provision in the subcontract between the general and his subs that binds the sub to the terms in these forms!  If not, the sub can simply ignore the form and say it's not part of their subcontract!

It is ALWAYS important to KNOW exactly WHY any provision is included in any construction contract, home improvement contract or subcontract agreement. Not just the legal WHY and the WHY from case law, but also the WHY from experience in the construction trade!

There are so many "home grown" construction forms floating around the internet that were created from information "borrowed" from other forms by people who add things just "because they sound good."

Beware of any construction form created by or sold by someone who cannot answer the question WHY!

How do YOUR contractors forms work together?  Educate us! Here's your chance, don't be shy. Comment below.

Change Order Forms in Construction. Need em or Hate em.

Posted by Bill Baird on Mon, Aug 31, 2009 @ 20:08 PM

Change Order Form The love-hate relationship contractors have with change order forms is one of the most common phone topics we have here at ACT Contractors Forms. Some contractors consider change orders to be crucial to managing their jobs while others say change order forms are nothing but a bother and are unnecessary. What is amazing is some of the excuses we hear from contractors giving reasons for not using change orders.

How about one contractor who called to order lien forms and explained they needed mechanics lien paperwork to file a lien on a customer who refused to pay for some hidden damage ($5800 worth) found during their work.


ACT..."Did you have a clause in your contract to cover changes made necessary when damage is discovered.... I mean, damage that had been concealed during the standard visual inspection you made to create your estimate and scope of work for the job?"

Contractor..."Of Course, I'm not an idiot! I have done hundreds of these jobs and know there are always situations like this so my contracts cover my a**!"

ACT..."That's great!  Did you get them to sign a change order form agreeing with the extra cost before you did the work?"

Contractor... silence..... "I don't need a change order, this is standard stuff. Everybody knows that any bid is based on what I can see at the time. Anything else is an extra! This is just common sense. I want my money."

ACT... silence.... "I'll get those lien forms to you right away, but sir, you might want to order some change order forms for future use to keep problems and disagreements like this from happening in the first place... just be sure the contract you use allows for changes and that you get the change order signed BEFORE you do any extra work. You know, it is pretty hard for your customer to argue about extra costs when they have already agreed to them in a written change order form."

Contractor... silence... "Just get those lien papers to me, I am just a small contractor and most of my work comes from referrals and I never have problems like this."

ACT... "Except for this time! Use a change order next time Sir and your customers will thank you for making them aware of extra costs instead of thinking you are trying to get over on them by hiking the costs for no reason.  I'll get those lien forms right out to you..."

Moral of this story.. The time necessary to fill out and get a change order signed will save you...

  • A lot more time you will spend arguing with your customer.
  • A lot more time dealing with fallout and lost sales over the customer "badmouthing" your company.
  • A lot more  time spent at the county recorder and courts and lawers, and...

Even "small" contractors working from referrals, need to consider some documents as their friend rather than a bother.

YOUR bank acount, rather than YOUR LAWER'S bank account, will thank you!


Have an experience with the change order process that you want to share?  Questions about change orders? Please comment below.

Topics: change order, disputes, construction, change order forms

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