Although John Rusk, owner of Rusk Renovations, in New York City, has worked as an arbitrator or mediator in more than 200 construction industry cases, he’s really interested in dispute avoidance. “There are consistent mistakes people make,” Rusk says. Avoiding these three simple things can help contractors stay out of the courts.
- Lying to your clients. “If clients ever catch us in a lie — we said we ordered something and didn’t — they lose trust in us and feel as if everything we might say is a lie,” Rusk says. “One small mistake turns into a giant breech of faith that no one recovers from. We train our employees that if they make a mistake, they should tell the truth and get it over with right from the beginning.”
- Using a poorly written contract. “A lot of disputes I see are where people say they have a handshake contract or ‘I’ve done work with them before and we’ve never had a written contract so I didn’t need it,’” Rusk says. He uses a standard contract created by the American Institute of Architects. “It’s not perfect, ... and it’s particularly good for architects, but it’s well tested in the courts and it’s consistent.” He warns: “Be very careful about a contract developed by a client. Take this to your attorney. I’ve been asked to sign things that are illegal in New York state.”
- Going to the mat with a client over a project. “Getting into a formal dispute will so injure your reputation, and attorney fees are expensive. It’s very difficult to win. The amount of money and the time you put into it brings you no profit,” Rusk says.
—Stacey Freed, senior editor, REMODELING.
More REMODELING articles about conflict resolution:
Got You Covered: Business How-to — Avoid disputes by consistently documenting job progress
Nobody’s Perfect: Business How-to — Apologize to a client
Mediation is Good Business: Having a mediation clause protects you and your clients
ByLaw: Setting Expectations: Avoid disputes and client misunderstandings
