December 6, 2010
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Question:
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Ken
We can only take 10% or $1000.00 whichever is less for down payment on a resi system. Does putting up stickers and a yard sign qualify as start of work? If my salesman gets a contract signed and then sticks a yard sign in and slaps up a few window stickers can we accept payment in full even though we will not return for about 4 to 7 days to install?
Regards,
Rich Whitlock
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Answer:
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Good question. Another good question is when is a job complete? Absent a clear criteria in the contract [or statute if there is one] common sense should prevail. Not your comment sense, but some Judge's common sense. No, that's not an oxymoron. But there is no single definite answer.
Seems to me that putting up a decal and yard sign starts the work. It's part of the protection; it's probably specified in the contract as something that's included in the system. My contracts are for "security equipment", not necessarily electronic equipment.
Keep in mind that your subscriber will have the 3 days from execution of contract, and delivery of the cancellation notice, to cancel, with or without the decal and signs.
Pretty much same idea applies to when the system is completed. Is it before or only after a test signal? What if part of the system is not installed, but the test is completed anyway? When an installation is completed is often an important milestone. Lot's of recurring contracts provide that payments don't start until the installation is complete. I changed that long time ago in my Standard Form Contracts because we had collection cases where the subscriber claimed the recurring revenue never started because the job wasn't completed. Sometimes an incomplete job was because the subscriber wasn't ready for the system. My contracts now provide for recurring revenue to start on the first day of the month following execution of the contract; ready or not.
Some installations, such as fire, may be complete when the AHJ says so. That's an easy criteria. You can by contract define when you are starting and when you are deemed completed for payment and other purposes.