Ignore the Lawyer? (Part 2)

What Happens if we Ignore the Lawyer? (Part 2) (To read part 1 go here)

Wishful Contracting LLC had gotten in the habit of doing work for Brain University that was outside the scope of their signed contract. They were still an approved vendor, and they were still getting paid. Even though they didn’t technically have a contract, BU Bob was doing a great job of making sure all the work Fred and Carl did onsite was paid for.

Then there was a problem. Brain University had a bit of an emergency. The heating and cooling system in one of their buildings completely failed on a record-breaking hot day. They called Wishful Contracting for emergency assistance!

On exceptionally hot days, Fred and Carl’s schedule was already packed, but for BU Bob they made the time. Olivia even sent out one of their lead installers to take a look at the problem so Fred or Carl, whoever could get there first, might know what was going on.

The system that the former contractor had installed was faulty. It might have met minimum requirements, but it was not strong enough to handle really hot days. The whole system was overloaded and the building chiller would need to be replaced. Carl got there and confirmed that the whole system would require replacement, but he thought he might be able to jury-rig something to help the system limp along for the rest of the day.

BU Bob was grateful. The building had been quickly heating up and they were in danger of having to cancel classes. Thanks to Carl, they could get through the day, but Bob said they would need something, anything, to keep going. It was final’s week next week, and they just had to have the problem fixed! Anything Wishful Contracting could do would be greatly appreciated!

Wishful Contracting Saves the Day!

Olivia stepped up to the plate to help. She got an agreement with their own supplier to make a chiller system available right away, but Wishful Contracting would have to pick it up themselves. Mike took one of their apprentice installers with him to go get the system loaded up on a truck. Olivia arranged a crane for after-hours and Fred, Carl and the installation team got the new system in.

In less than 72 hours, Brain University had a new system installed. Carl’s jury-rigged solution held long enough to keep classes going. Final’s week would be comfortable.

Olivia issued the invoice. This emergency work and the side of the project resulted in a $28,000 invoice. Bob thanked everyone at Wishful Contracting and said he’d make sure the invoice got paid.

A Problem Arises

Payment didn’t come right away. That wasn’t a big surprise since Brain University was closed for the holiday break. No one was worried about it since they would just as soon have the income applied to the following year for taxes anyway.

Then Bob called. There was a problem.

The size of the invoice triggered an evaluation, and the Director took note that Wishful Contracting LLC wasn’t the same company that was on the contract that opened the heating and air conditioning project on that building.

Since the previous system was faulty, the Director expected the guarantee to have been used that would have paid for most or some of the work. But Bob hadn’t ever contacted the previous company on the work guarantee because, to be blunt, he didn’t trust them.

The problem for Wishful Contracting was more dire: BU Bob couldn’t get them paid ““ at least not right away. But their own supplier needed to be paid for the system they had picked up. And they had to pay for the crane, and the installers. Fred and Carl would be willing to wait, but the sub-contractors had to be paid.

They would be out of pocket more than $10,000, and now there was no guarantee they would be paid at all.

The Judgment Call

When you make a judgment call, you’re balancing risks and benefits.

In this case, Wishful Thinking made the judgment call to keep working outside the scope of an enforceable contract for payment. For months, that paid off.

Things can go the other way, too.

Now, Wishful Contracting was going to be $10,000 out-of-pocket on a project and might never be paid the $28,000 they legitimately invoiced. Worse, they had no enforceable agreement and they knew that going in.

It was entirely possible they would never get paid.

Technically, they always knew they might not get paid. But BU Bob had always gotten them paid! They had gotten comfortable with the arrangement, and so far, it was a win-win all around.

But things can go wrong. Make enough judgment calls, and some of them will work out”¦ and some won’t. It’s just the nature of the game.

Wishful Contacting made a lot of money on this judgment call for a lot of months. Then it went bad. Their out-of-pocket was still less than their extra profits, so it might not be a BAD deal”¦ but suddenly it wasn’t a good deal either.

That’s just the way it goes sometimes.

Ignore the Lawyer and you could lose a lot of money.

You’re the one that has to decide if it’s worth the risk.