One of the functions of ECSSA is to respond to Customer complaints against registered members. If we were to confine our activities strictly to complaints regarding poor workmanship, we would have very few complaints indeed.
However, over 90% of all complaints received have their roots in money, or the lack of it. What might initially be presented as a gross failure on the part of the Contractor to complete work for a Customer, almost inevitably discloses that the main reason for the failure to complete by the Contractor stems from a failure to pay on the part of the Customer. It is a basic law of contract that a fundamental breach of the contract by one party releases the other party from all further obligations under the contract. Nothing could be more fundamental than a failure by the Customer to pay for goods supplied or services rendered.
However, Contractors often have only themselves to blame when they find themselves in a commercial dispute with their Customers. It is amazing how many contractors start work on installations without having first being clear on the four basic items which are essential to the smooth operation of any contract.
(a) Firstly, be clear as to who you are working for, ie. are you working directly for the Client, or are you a Subcontractor to a Builder or a main electrical contractor. A high proportion of disputes arise from the fact that clients often change the specifications of a job or order a substantial amount of extras without first clearing with the builder, and the electrical contractor, as to who is to pay for these extras. It generally ends up in disagreement between the builder and the client, and often ends up with neither of them willing to pay the electrical contractor. So ensure that you know who you are working for, and who has authority to authorise alterations or extras.
(b)Make sure that you know exactly what you are doing for your customer. Additions to the original specification are fine provided that all concerned understand that these are extras and will have to be paid for as such. It is important however, to maintain consistency in charging for extras. There is little point in expecting that a customer whose basic installation was priced at €50 per socket is going to pay €150 per socket for the few additional ones he ordered. Such inconsistency would almost invariably ensure that legal action to recover money for extras would fail on the ground of overcharging.
(c) Agree on how much you are going to get paid for the basic installation, and how much per point or per hour will be charged for any extras added after the original specification has been priced and agreed.
(d) Agree on when you are going to be paid for the work. If there are to be stage payments, set out the percentage of the overall price which is to be paid at various stages. A Contractor is quite within his rights to cease work if, following an agreed period after a
payment becomes due, the customer fails to honour the amount invoiced. It is also important to agree amounts for retention and how long this retention period is going to be. Contractors should, if at all possible, avoid lump sum contracts because, strictly
speaking, in a lump sum contract there is no provision for interim payments and the customer is entitled to demand that all the work, including the snag list, be
completed to his satisfaction before money becomes due. It is a little late for the contractor to find out at that stage that his customer is neither able or willing to pay for the job!
Unfortunately we hear on an ever increasing frequency of electrical contractors who have been stung for substantial amounts of money by builders and developers who got carried away on the recent building boom, and who were working on the basis that today’s turnover paid yesterdays bills, while tomorrow’s turnover will pay for today. Regrettably, in many cases, there is no tomorrow and various contractors and suppliers are left to foot the bill for the developers over-enthusiastic expansion.