Contracts for Custom or Restoration Auto Shops

Generally speaking restoration and custom auto shops have a contract form that is taken off the shelf and used for each customer. This practice can turn out poorly for both the customer and the shop. Sometimes shops have contracts that are so one sided that that a court won’t enforce them and the customer is actually benefited. Furthermore, because the shop owner is responsible for the writing of the contract all ambiguities in it are resolved in favor of the customer. On the other hand the customer can find himself to have waived his rights and to have bound himself to something far from what was understood at the time of discussions. It benefits both sides to have the contract actually fit the parties’ understandings.

Here are some things that should be considered in each contract: There should be an estimate or ceiling on the cost. This can be left a little loose, like saying “plus or minus ten percent” but every contract involving a substantial amount of work should have a total cost reference point. This ceiling is not worth much without a precise description of the parts and services that will be performed. A good restoration shop will sometimes ask for a fee to provide this estimate as a reliable one takes a lot of time, but a reasonable fee is money very well invested by the customer.

With parts, the contract should state the markup if any. Remember most parts are delivered to the shop, so you should not pay for deliveries or trips to pick up parts without prior approval.

The contract should identify what services will be billed. Some shops bill for time phoning in parts orders and for time correcting errors made by mechanics. If this is not agreeable, the contract should say this.

The contract should say what information will be provided with the bill. Information useful to the customer is the name of the person whose work is being billed and a reasonably precise description of what the person did. Avoid generic entries like “worked on body” or “worked on quarter panel.” All of this should be worked out in advance. It is useful to have the bill indicate the estimate for the work and the percentage of completion. It is important that concerns about the bills be worked out at this stage.

The customer should not waive his rights under the Automobile Repair Act.

There should be a process for change orders and for work that exceeds the budget. It should involve something in writing and it should be agreeable to both sides.

It is a good idea with larger shops to see that the contract contains some assurance about the experience level of the people working on the car.

If the salesperson made representations to the customer, the customer should be sure that those are in the contract.

There should be some date by which the shop can give assurance that the work will be done.

The contract should be clear, objectively verifiable, about the standard to which the work will conform.

A wise customer will have an expert make periodic inspections of the work to report on progress. The contract should provide for this and assure the shop’s cooperation with such inspections.

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