Bad experiences often lead to bad legal language.  Every strange warning label you’ve ever seen on a product is the result of a lawsuit.  Even “warnings” that sound like common sense, such as “do not iron while wearing shirt” are the result of folks seeking common “cents.”  (By the way, if you’re interested in more of these you might find the Wacky Warning Label site run by the Michigan Lawsuit Abuse Watch of interest).

Contract often evolves the same way.  A recent article in the NY Times discusses how builders dealing with prima donna homeowners add contract clauses to avoid repeating prior bad experiences. 

Take for example the contractor who leaned a material delivery up against a fence.  The added pressure made the gate to pop open and the family dog wandered off causing the homeowner to launch into an abusive tirade.  The dog came back in the middle of the argument, but, to avoid becoming a verbal punching bag the next time there is now a clause that says workers “shall not be expected to keep gates and the like closed for animals and children.”

Another contractor got burned when a client withheld $10,000 due to a missing kitchen cabinet door knob.  Now their contracts reads “final payment is due upon substantial completion.”

On the flip side, as a homeowner, if you’ve ever had to call a contractor umpteen to get them to finish a project, the “substantial completion” language may be a problem.  It therefore pays to read contracts and to seek clarification about mutual expectations — even the ones that seem obvious to you. 

It’s cheaper than a lawsuit and will save a lot of frustration.  

This entry was posted on Wednesday, May 21st, 2008 at 6:02 am and is filed under Communications, Decision Making, Costs, Business Blind Spots. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.