Contracts and Change Orders in a Small Business

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I began to use change orders in business because customers always want more than they have paid for, and the longer you work with a customer the more they feel entitled to free services. A change order takes place after an original contract has been signed by both parties, and additional work is required. A change order is most often used in construction and service trades when more work must be performed than originally agreed to, because conditions arise that were not originally known to either party. A change order does not nullify the original contract, on the contrary, it adds to the original scope of work and cost of the project. I knew a contractor who owned a motor yacht with a small dinghy attached. The dinghy was named Original Contract, and the yacht was named Change Order. I started a business named AAA Computer Repair. Unaware of what services the customers would require, an hourly rate was charged that began when I arrived at the place of service, with a minimum of one hour for a service call. The charges per hour did not vary at all, for all services provided, including installing software, fixing hardware, or software training. Most service calls required less than one hour of time and customers were willing to pay for the one hour rate of service without any questions or disputes. However, I began to develop long term relationships with many of the clients, especially if they required software training. A decision was made to design a software training package, which would allow for a more manageable hourly rate and defined what was included in an eight hour training package. The more time spent with each client, the more work was acquired for their businesses, home offices, and preparing computers for college. A general contract was created for seven services provided, after speaking with a lawyer to make sure the contract would be legally enforceable. "A contract is a legally enforceable agreement between two or more competent parties to perform or avoid performing, certain acts that they have a legal right to do and meet certain legal requirements (pg. 79)." The description of the services performed the cost of the specific service, the hours involved, and a place for all parties to sign and date.

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