Landscaping Contracts | Topics in this Article
Non-Refundable Contract Deposits
Contract Payment Terms
Landscape Change Orders
Plant Warranties and Guarantees
Brick Paver Warranty
Lien Rights, Lien Waivers, Filing a Lien
Permits
Excavation and Utility Markings
Failure to Enforce Contract Terms


For your landscaping contract to be binding it needs to contain 3 basic elements: First, both parties must be capable of entering into a contract (think minors, non-married persons living at a residence, etc). Next, there has to be consideration. In other words, it has to be an arrangement where you agree to provide landscape services in exchange for their payment - both parties need to receive consideration in the contract. Finally, there has to be a "meeting of the minds". Most commonly this is demonstrated through the written contract, documenting the terms of the agreement and requirements for both parties. But even with these three things in place, you've only scratched the surface of how to write a landscaping contract.

visit forums greenWhen I first started in business I believed that our written agreement should be fair to both parties; there should be terms favorable to us, and terms favorable to our clients. Problem is, there are clients out there who seem to live for trying to wiggle around and out of contracts. After we did business with one of these kinds of clients and lost nearly $10,000, I realized that the first priority of our contract is to protect us. So I added many terms to our landscape contract that continue to protect our interests today. Here are some of the contract terms we added based on our experience, and you'll also find a link to a free landscaping contract sample.

Non-Refundable Deposits

As you'll see later, you always have the option of not enforcing a contract term, and this may be one you'd choose to not enforce under certain circumstances (a client's spouse dies prior to work starting, for example). But this contract provision is designed for those few occasions when a client will stop production before it starts and want a full refund of their deposit, forgetting that you've already incurred costs in securing materials, equipment rentals, and the lost time of filling that space with new work. This provision will protect those payments already made to you and help defray any costs you'll have in ending the project prematurely.     Back to Top ^

Contract Payment Terms

Stacked paver bricksThis one is probably the most important of all the contract terms you'll have. Important to have in the contract and even more important to enforce. It seems that of all the stories I've heard of businesses going bankrupt, it's most often those businesses that are really busy with lots of backlogged work. They get so busy that they lose track of their receivables and don't make the effort to collect payments in a timely manner. Then all of a sudden they have $50,000 in materials bills and payroll and no money to pay them with. The downward spiral starts, fighting to collect money from slow-paying clients, racking up interest and finance charges, and possibly losing the employees to install the contracted work. I saw a 40 year old landscaping business have to get liquidated two years after it passed from father to sons for this reason (and a couple others). So always be sure to collect when you're supposed to, and follow the collection steps you outline in your agreement.

As for the terms you should include - these will vary by business and your own comfort level, but I offer ours as an example. We expect a deposit of 20% of the contract price at the time they sign the contract, and another 50% when we start (our contract stipulates the second payment as being due "the day we start", but we're sometimes flexible). This arrangement ensures that even if our relationship with the client completely degrades during the project and we have to fight for months to collect the final payment, we won't lose much money.

Final payment is due 15 days after our final invoice, and it's the adherence to the contract terms for the second and third payments that should be your priority. Our clients get a phone call on day 16 if we haven't received their final payment. Though our goal is collection, our tone is that of an interested service provider. They usually don't need to be told why we're calling - they already know. We ask if everything with their project has turned out the way they've expected and if they're happy with everything. Most often they'll say they're very satisfied, at which point we'll mention that we're asking because we hadn't received the final payment and were wondering if it was because there was a problem. Staying cordial is a good way to maintain a good relationship with that customer; they might end up hiring you for more work or referring you to their wealthy friends! But there may come a time when you need to hire a collections company to handle an outstanding debt, or even take the client to court for their unpaid bills.     Back to Top ^

Landscaping Change Orders

I've worked for a few clients who seemed to think the design process started when we arrived in our trucks to install their landscape! An indecisive client prone to changing their mind often can be the guide on your path to insolvency - you should take the steps you can to protect your company's bottom line when it comes to contract changes during installation, and this is done with change orders.

Your change orders should protect your interests both when work is added to the project, and when it's deleted. Included in the change order should be an administrative fee, which will help you to recover those costs associated with lost design/sales/production time spent in making additional calls to secure more materials, or sending someone out to pick up those extra 5 plants, etc. It's especially true when portions of the project are deleted in the change. For example, your contract calls for planting three trees among other things. Your client decides they don't want the trees. But you've already ordered them, they've been dug, and you've taken possession of them. So now, you either have to return them and possibly pay a restocking charge, or you have to take the burden of caring for these trees yourself until you can sell and install them in someone else's design (not to mention the risk of loss of one or more of the trees). An administrative fee will help offset those costs. It will also make your client think twice about asking for more changes. After all, you're there to install a landscape, but you need to earn a living, and uncompensated changes can erode every last bit of profit margin in a project.     Back to Top ^

Plant Warranties and Guarantees

This is another important clause to provide for your protection if you offer a guarantee on your plantings, because you can limit the types of plant injury or death that you will offer remedy for. Most often this means limiting the plant guarantee to those things you have control over such as providing a client with a plants that require frequent watering and shortly after planting, the client leaves town for two months and the plants die. You shouldn't have to pay for the client's lack of attention to their plants.

Typically we offer a one year guarantee on woody plants (trees, shrubs) that we select and plant, provided they were cared for in the manner we recommended, and did not die from abuse or disease introduced after planting. And we don't offer a warranty on plants we did not select (such as plants the client purchased themselves, or transplanted trees or shrubs from the client's own property). We don't offer a warranty on perennials (and certainly not annuals) - they are just too small and delicate to offer replacement if one dies.

As for the terms of the replacement, we do leave ourselves room to charge for the labor needed to replace the tree or shrub, but most times we don't collect it in the interest of good customer relations. Whether or not you follow the same policy is something only you can decide.

You'll find an interesting discussion about having an "Act of God" clause in your contract.     Back to Top ^

Brick Paver Warranty

It's become pretty standard to offer a warranty of paver work (as well as retaining walls), but I find the standard length of a warranty varies quite a bit by market. When I first started in my market I offered a 3-year warranty on all hardscapes, but as it turned out, all of our competitors, big and small, only offered a single year. It was clear that I could cut back our warranty by a full year and still offer a better warranty than any competitor in the area. However, in some markets even a three year warranty wouldn't be enough, as many contractors now offer 5 or 6 years as a standard part of their landscaping contract. Whatever the length of your contract, you should consider the type of clients you'll do business with in your market, how likely a project is to have heaving/settling issues over a specified warranty period, then add some small amount to the project price as a form of insurance for the warranty.

Lien Rights, Lien Waivers and How to File a Lien

Be sure to include any relevant language required by your state regarding your assertions of lien rights over a client's property. Also, we've had a few discussions on our site about how to go about filing a lien against a customer.     Back to Top ^

Permits

Spell out clearly who is responsible for obtaining permits - you or your client. Pulling a permit for landscaping work can sometimes be as easy as stopping in to the inspector's office, filling out a short form and writing a small check. Other times it can involve creating multiple scale drawings, filing for variances, appearing before town boards and more. So it's important to define who is responsible, and if it's you, be sure to leave yourself room (possibly via an open-ended T&M (Time and Materials) clause) to charge the client if your expenses start mounting as you work to obtain that permit.      Back to Top ^

Excavation and Utility Markings

While you might define the customer as being responsible for getting utilities located, ultimately it's the company whose equipment is digging into the ground that is responsible for knowing where the utilities are. If the utilities are marked thanks to a client phone call and you hit a line that was unmarked, you'll still be at fault because you didn't arrange for the utilities to be marked yourself.

This is why you'll often see a commercial project get it's utilities marked several times over the course of a few weeks; each company has to have their own ticket number and their own set of marks to release them from liability should they hit a line in an unmarked area.     Back to Top ^

Failure to Enforce Contract Terms

This is one of the final terms of our contract, designed to give us some flexibility in enforcement of terms without voiding the entire contract. It simply states: "The failure of [company name] to enforce any right accruing under this agreement shall not be construed as a waiver of a subsequent right of [company name] to enforce the same or any other right, term or condition."     Back to Top ^

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