Each winter professional snow and ice management contractors must walk a fine line between entering into a mutually beneficial relationship with their clients and being dragged into a one-sided agreements with little upside and a lot of risk and potential liability.

A great deal has changed within the industry over the years, from equipment and material to best practices and – most importantly – with contract language and who’s responsible for the risk associated with snow and ice management. We selected a group of industry leaders of varying backgrounds to gain more insight on this vital issue and to better understand how to best manage snow and ice contracts.
 

Q: How has the nature of snow and ice management contracts changed for you in your market over the last five to 10 years?

Troy Clogg, owner of Troy Clogg Landscape Associates in Wixom, Mich., says the process has become much more onerous. “Contractors, as a whole, have lost control and it’s become much less of a partnership. Indemnification has changed. Payment terms have changed.

“The business model is changing back. More clients are ‘partners’ again. The industry is shaking up. Use the ‘salt scare’ drama to turn the tide in the industry. Talk to the client. Drama drives change – drama and pain.”

Steven Jomides, founder and president of Lawns by Yorkshire in Westwood, N.J., says contracts and/or requests for proposals (RFP) are more unilateral than ever. “Owners and/or third-party managers have looked to shift liability onto the contractor.

“Contracts are also using verbiage that looks to define the definition of snow as, ‘freezing rain, sleet, ice snow, etc.’… Snow and ice are treated differently. They also look to use words and phrases such as ‘completely,’ ‘curb to curb’ and ‘maintain safe conditions.’”

Tom Canete, president and CEO of Canete Snow Management in Wayne, N.J.: “New Jersey is currently ranked No. 1 in the nation for frivolous slip-and-fall law suits, so having an Ironclad snow contract is extremely important these days. Lawyers are making a lot of money off of lawsuits due to vague or basic contractor contracts when a lawsuit is run through the judicial system.

“Always have your attorney or insurance agent read and update your snow contracts every year or two to make sure you are in compliance with current lawsuits that have been awarded, settled or thrown out of court…The devil is in the details.”

Kimberly Jewell, general manager of GroundMasters in Denver, Colo., is entering her 16th season in the snow-and-ice-management industry, and she says contract language is ever-changing. “For contractors in the snow removal industry, it goes without saying that the litigious world in which we live has, without a doubt, been the driving force. And that is by no means to infer that we are not willing to take responsibility for our own actions as an organization ... quite the contrary ... we will and we do. The challenge we face is, quite simply, the verbiage within the contract language that could, in any way, be misunderstood or misconstrued.”

Agreements have become more detailed over the years, says Michael Schaal, president and founder of Two Brothers Lawn & Snow in Milwaukee, Wis. “My company has only been in business for 10 years. In the beginning, the contract was signed to set the price; now every contract spells out the customers’ needs and the job we are to perform. It took a few conversations with a lawyer friend to understand that, but without a contract, who is to know what the exact job is, if the customer has an issue with a charge or why something was or was not done? The contract spells it all out and the signature seals the deal to protect you.”

More potential clients are going to national snow maintenance providers, says Josh Przygocki, owner of Sassy Grass Snow Management in Leslie, Mich. “This makes the process of documenting, reporting, invoicing the services provided difficult because [of] all the calling systems, text messaging, more paperwork floating around in trucks. It’s time consuming holding up a truck/employee from starting next site. The billing is much more difficult with added processes, papers and confirmation codes required or combination of more than one required. If you are missing a piece of paper or number – even though you provided the service – you don’t get paid.”
 

Q: What areas of a snow-and-ice contract do you hope to maintain the most control?

There are so many pieces to snow and ice management contracts, but if Clogg had to pick one ... the out clause has to be the same for both parties. “It’s not a three-year contract if the client can get out in three days.”

“If you’re not willing to talk, is that really a compromise?” Clogg asks about the contractor-client partnership. “Compromise is when both parties are equally uncomfortable ... and satisfied.”

Jomides: “The indemnification clause is most important.”

Canete: “After a snow event, when our properties have been plowed, salted and inspected, we cannot be held responsible for a slip-and-falls days after ... as a result of a property manager not notifying us of solar melting during the day and refreeze at night or wind-blown snow off roofs back on the lot, etc.”

The legal part which protects the customer and the company is the most important part, says Schaal. “And explaining that so the customer understands it is the hardest part. It is very important to understand, because it protects both parties if any problems occur.”

Przygocki: “Maintaining that I make the decision of when it’s time to service an account such as the ‘trigger depth’ is of high importance. We as professionals know when weather conditions and/or site conditions require services to start and when to stop throughout a storm. If we aren’t making the decision on an account of when to service, and instead have to wait for a request by the customer, the No. 1 risk is having an account needing service left vulnerable to slip and falls.”
 

How do you find a compromise with property managers and owners who either want to use their own contracts or are stubborn about contract language or particular areas of contracts?

This is a challenge and is handled on a case-by-case basis, says Jomides. “The main sticking point usually centers on the indemnification clause. Most times we can achieve a happy medium, but sometimes we cannot and have actually signed a contract provided by the client as long as we feel we can properly manage the risk.”

Clogg rarely uses the client’s contract these days, though that hasn’t always been the history, adding that he uses “honest and transparent” knowledge of the industry and sends them the numbers he needs. “If they don’t want to talk, what kind of relationship can it be? That’s never healthy.”

Canete: “We basically will read their contract and cross off language we do not feel comfortable with. Most of the time the client will allow us to dismiss the language we feel is unacceptable to us. We can negotiate and try to compromise any remaining contract verbiage the client does not want to remove. It basically comes down to how bad do you want this account and if the risk is worth the money.”

A decade ago, Jewell says GroundMasters’ contract was the contract used. “So we could modify it as necessary to meet a client’s criteria and we knew the level of expectation. However, this is no longer the case, as in almost 90 percent of all agreements it is now the property manager’s contract, dictated by their organization, or the use of the contractor’s as an ‘exhibit.’ However, it is secondary to the clients and their contracts ultimately prevail in the case of conflict.

“The flaw in all of this is that the contracts our clients dictate us to use are drafted by their legal department and is often so cookie cutter in design, never read or even understood by the property manager or ambiguous and contradictory to what the manager says they need or want for their particular site.”

Schaal: “I have been lucky enough to not have any major conflicts with a customer wanting to use their own contract. If there is an issue with the way something is written in my contract, the customer and I will add or take out information so both have a same understanding.”

Przygocki: “When they want to use their own contracts, there is no compromising. If we want to change something, they will just go with someone else to do the work, but if it’s our contract, it’s OK to change.”
 

How do you work through differences in contract language without losing the account?

Do we wish to control the wording of the contract, asks Jewell. “No, but what we do desire is to hone in on what the client really needs and wants and, this is a biggie, what the client is willing to pay in order to achieve their needs and wants.”

She points to an earlier version of their contract that stated the company would service sites on holidays at an additional cost of 25 percent. When Denver was nailed with back-to back-blizzards late one December, many people were required to work Christmas Eve and/or Christmas Day as well as New Year’s Day. Upon receiving the bill, some clients demanded the charges be reduced to normal rates. The paragraph about holidays within the GroundMasters contract was disregarded by the property manager. What was the lesson learned on Jewell’s end to avoid future conflict?

“We determined it is not only necessary to relay information, but at times to require the customer to become ‘engaged’ in the contract. We did this by simply adding verbiage within our contract that requires the manager to indicate whether their site is open on holidays, and if not, when they truly want/need to be serviced. Result, no more misunderstandings.”

Clogg: “If their demands are tough, compensate me accordingly. Give me time and money to accomplish a goal and I’ll do it.”

Jomides: “In some cases we end up having to walk away from bids. This is something we prefer not to do, but does occur.”

For Schaal, relationships are No. 1. “Being a family-owned company, every customer counts. Contracts are written and signed to protect both parties, not to benefit the one side. As owner, I personally meet with and talk to every customer and walk the property so we are on the same page. They know what I have in mind and if it’s not what they want, I change or I don’t get the contract. Each contract has a summary of what was discussed and, once agreed on, both parties sign at the bottom.”

Przygocki: “The customer is always right. You suck it up and do the work or else you will not be out working. Especially when it’s a customer that provided the contract.”
 

When is walking away from an account – due to differences over a contract – the most feasible action?

Walking away from an account can be a good thing if there are non-agreeable issues within the contract, says Canete. For example: The client must give the contractor the approval to start snow-and-ice services; client’s bad payment history or long payment terms; salt is to be applied only upon client approval; only one salt application is to be applied per event; and no salting will be done by contractor. “There are more issues that can cause liability issues for the contractor, but these are a few important ones to steer away from.”

It’s on a case-by-case basis, Clogg says, acknowledging contractors starving to get work may be forced to take some unhealthy terms. “Starting with a difficult contract isn’t easy, but not necessarily a deal breaker. Don’t need a new client relationship to start badly.”

Jomides: “We need to weigh the exposure, how much we can control and the upside on the finance side. If we feel the site has heavy pedestrian activity 24/7 and our exposure for a slip and fall is high, we may pass on this, unless the dollars are there to fund proper service.”

Jewell: “As a snow and ice management company, we haven’t walked away from a contract, or a client because of the contract language. That is not to say that we wouldn’t if we could not come to agreeable terms, but if you strive to truly understand the level of expectation of services on the front side, and ensure it’s spelled out within the contract language on the back side, all parties can truly win.”

Schaal: “The only time I have walked away from a contract is when the customer wants me to lower the price to compete with a much smaller company, knowing they cannot complete the job but wants to work with a reputable company. That is when the contract helps to give the customer the piece of mind that the work is completed 100 percent every time.”

Przygocki: “If you’re unable to come to an agreement; if you foresee that potential differences may occur later in season… then the account will not be profitable. And if we are unable to make the decision on when to service because they want it ‘request only’ or a ‘trigger depth’ of 4 inches.”

According to Clogg, a shift in the way the industry operates – returning to a truer sense of a partnership between client and contractor – will take time and won’t come easily. The first step is having a difficult conversation with the client. “People feel like we have to do the same old thing. The only way it’s going to change is if it hurts. People change with pain, crisis and drama. Ask for help… Be honest and transparent. You’re in control.”

Rob Thomas is a Cleveland-based writer and frequent Snow Magazine contributor.

I have had the pleasure of representing professional snow and ice managers in litigation and as general counsel for more than 10 years. During that time, the scope and breadth of the contracts I have seen have run the gamut.

For example, I’ve seen book-length contracts better suited to a billion-dollar commercial real estate deal than winter services. On the other end, I have seen contracts hand written on the back of scratch paper.

Over the course of reviewing numerous snow and ice management contracts, I have also seen many errors that, when left unchecked, can pose huge problems for the snow contractor. Here are my five areas of concern that need to be addressed when finalizing a snow and ice management contract.
 

1. Everyone’s John Hancock

First off, I often see contracts that are not signed by all parties. If a contract is not either fully executed, or executed in counterparts, it is simply not enforceable. The simple solution is to make sure your file contains a fully executed contract. Additionally, the contract should have a section that permits signing in counterparts, meaning that not everyone has to sign on the same document. If the property owner/manager signs on one contract and the snow plow contractor signs on another contract, then it would be considered fully executed.
 

2. Just say when

Often the duration of the service to be completed is left out of the contract. The length of the contract is incredibly important. The exact dates the contract should be enforced need to be detailed clearly in the terms. For example, if it’s for only one winter, the contract should state: “This agreement shall remain in effect for the season starting November 15, 2014 and ending April 15, 2015 unless earlier terminated pursuant to this agreement or by applicable law.”

If the contract term is not clear, the opposing parties can make an argument based on whatever benefits them the most. Identify the exact terms of the deal. Do not leave anything to chance.
 

3. Unfinished business

Another major problem I see is the scope-of-work section does not properly detail the how, when and where the contractor will perform operations. Even when there is sufficient detail, there is language that puts unfair, unattainable and unrealistic requirements on the contractor. For example, avoid “continuous” (i.e., “continuous service” or “continuous monitoring”); “bare pavement,” “zero tolerance,” or “slip-free conditions.” Instead, use words that permit servicing within a reasonable period of time and service that is consistent with Industry Standards.
 

4. The Almighty's role

Fourth, the contract must contain language to limit responsibility for acts of God or other events out of the contractor’s control. For example, delays in performance caused by strikes, weather conditions and inability to obtain material. This language is often missing and could play a role in defending claims from the property owner/manager for failure to perform duties, as well as claims from a slip-and-fall plaintiff.
 

5. Bad language

Lastly, the indemnification and hold-harmless language is one of the most misunderstood sections of a contract. As a result, I see contractors sign and ask questions later.

Depending on whether the language is beneficial to the contractor or not, it can impact the liability of the parties, including the obligation to defend and indemnify. This language increases exposure, as the snow contractor’s carrier will have to represent not only the insured, but also the indemnified parties.

It is incredibly important to avoid language that requires the contractor and their carrier to provide defense and indemnification in the following scenarios: (1) based solely on allegations in the Complaint (look for the words “threatened or alleged”), or (2) without regard to whose act or omission could have caused the alleged condition.

Josh Ferguson is an attorney with the Philadelphia-based Kent/McBride P.C. and a frequent Snow Magazine contributor.

Marvin Montgomery knows a bit about the sales process. For more than 30 years, he has earned recognition and praise for his informative, practical and stimulating programs that reflect his basic philosophy: “Preparation and practice are the keys to sales success.”

Montgomery began his career with one of the nation’s largest jewelry chains and worked his way up to director of sales. It was here that he began refining his approach to training. He has trained more than 1,200 associates in 95 stores during his time with the organization. Since then, he has assisted hundreds of organizations to meet or exceed their sales goals.

So we were thrilled when Marvin was a featured speaker at the 2014 Executive Summit in Miami. We sat down with him afterwards to pick his brain about the negotiation process and how not only to close the deal, but get contracts signed.
 

Selling snow and ice management services is only part of the equation, and often the real work comes when negotiating the contract. How much is this negotiation a part of business, how much is art and how much is just a game?

It starts way before you get to the negotiation. People buy services from people who they know, like and trust. Hopefully you’ve established this early on in the relationship when you first established the need and you’re now in the process of providing a solution. I try to get people to understand that you’re not providing a contract. You’re providing a solution. Use the word “solution” and “relationship” and “partnership” – these are the words that let the client know this isn’t a one-sided situation. [Clients] often aren’t used to this, and when they enter this process, the only thing they can go on is what they know from the past, and usually previous experiences aren’t all that great. So a lot of this goes back to addressing these concerns early on during the assessment. If you ask the right questions – for example, “Share with me the processes you’ve used when you’ve worked with contractors in the past like myself.” “What’s important to you?” “What are the non-negotiables.” – it’ll be easier to enter the negotiation process. Sometimes we don’t do this until it is way too late. Get these obstacles out of the way early on.
 

How long should the due-diligence process take?

There’s a couple of things. I try to get people to use the word “agreement” instead of “contract.” It’s amazing how one word makes a difference.
 

Why is that?

“Agreement” is less threatening. “Contract” says you’re going to need to send this to your attorney to review. Some of the best contractors don’t bring in a six- or seven-page contract. The longer and more convoluted you make this process, the longer it’s going to take. One of my favorite expressions, which is true, is “time kills a deal.” That’s where the deal dies, sometimes. The decision is made to go with your business, then they see the 10-page contract.

One of my favorites is when a client is told “We don’t have the contract ready yet.” What’s there to get ready? Why does it take so long to get the document prepared? It should be an easy template that just needs the numbers plugged in. If you don’t have the contract ready to go, you’re just slowing down this process. I understand each property is different, but the services are the same.

The other thing I see is the sense of urgency is not the same throughout the organization. The sales person wants to get this all buttoned up. He brings this urgency back to the office, but there’s no urgency there because whoever handles this process next doesn’t see a new client, they just see a pile of paperwork that they need to complete. We need to get people to understand this isn’t just numbers, but an opportunity and a person on the other end who’s waiting.
 

The belief is that conflict between the salesperson and the client will kill a deal. But you’re saying, these deals can get tripped up from within the snow and ice management operation.

A lot of it is internal. Sometimes the best company doesn’t win because they’ve taken too long to get back to the client and close the deal. Sometimes the worst company wins because they were able to maneuver quickly and had their document ready.
 

So how do you not lose out to the details? How do you speed up this process?

If I’m sitting down with you and we have a verbal agreement, and now all we need to do is dot the I’s and cross the T’s, then I’m going to establish a date and time when we’re to meet again.

Believe it or not, a lot of companies don’t do this. Often the meeting concludes with the sales guy saying “I’ll get back to you as soon as I have [the contract] ready.” And he’s off to his next sales meeting. You haven’t given the client any expectations… It’s as if there is no commitment on your part as to what the next step is. Don’t leave that meeting without a commitment as to when, where and how the next meeting will take place. Is it in-person or over the phone? Am I emailing you the agreement, and if so when will we meet to go over it together?

This industry is still doing a lot of “quote and hope” – you quote it and you email it out. So not only am I going to establish a date and time, I’m going to bring it back personally so you can’t blow me off. Again, are you selling a contract, or are you providing a solution? If you’re providing a solution, then you need to sit down together. If you’re just selling a contract, then yes, just email it out and don’t be surprised if you have a 10 percent close rate.

You can double your close rate overnight, all you have to do is schedule a date and time to come back and go over the proposal and finish the deal.

This creates a sense of urgency at your organization because now you have a date and time you’re committed to [to the potential client] and you need the paperwork ready for that follow-up meeting.
 

Often the sticking point isn’t about money. Instead, it’s about service specifics, liability issues, or who will make decisions during a snow event. How does a contractor overcome those impasses to close the deal?

During the planning stage you need to know what the negotiable and non-negotiable items are. Some things you know you won’t negotiate and you need to be confident up front about that when you go in. You also need to know the things that you will budge on. Now, when I’m speaking to the client, I can speak with some confidence and you have to explain the benefits of keeping that item in the contract language. However, you’re also confident about what you’re willing to budge on. It’s like buying a car and getting the floor mats for free – can’t budge on the sticker price, but they’ll throw those winter floor mats in for free.

The problem is a lot of contractors don’t know what is negotiable. Sometimes you do have to bend, but a lot of that can be determined up front. Remember, if you ask and listen, they’ll tell you how they want to be sold. You need to be asking the right questions early on to determine what you’re willing to bend on. Don’t hope what you leave in or take out will be a win-win in the end.

You also need to ask your own people whether or not you’re making it easy to do business with clients. How much language really needs to be in an agreement and how much is really just … stuff, but could potentially trip up a deal?
 

In this industry contractors want to use their contracts, but often the property manager wants to use their template agreement. Is there a way to use the property manager’s contract and not come out on the short end?

I tell people to use ACS – Acknowledge. Concern. Suggest.

So this is how that conversation could go: “Hey, I understand why you want to use the contract you’re using for your property. I’m concerned, though, that if we use that contract it’s not going to contain all of the language that we need to do what needs to be done. Let me make a suggestion: Send me your contract and I’ll match it against ours and I’ll make sure we include anything that’s absent from ours. How does that sound?”

If it’s a deal breaker, then maybe it’s the complete opposite – I incorporate my contact into the property manager’s agreement.
 

Let’s focus on equipment and material purchasing. Now they’re being sold to. Does the business owner lose perspective?

They’ll do the same thing to their service providers that’s being done to them by property managers and owners. You have to be conscious of this because what’ll happen is that people won’t want to do business with you.

Mike Zawacki is Snow Magazine’s editor.

The industry has changed over the years, including the propensity for clients to send us their written contracts. Back in the day, the majority of written contracts were ours, written by us (or our lawyers), sent to prospective clients for review, signing and then sent back to us for safekeeping. The system was easy and forthright. While there was some concern for liability issues, more or less we were laying out what was expected from us in service to our customers and what we expected in return in terms of payment for services rendered. As the snow and ice management industry became more sophisticated, and personal injury lawyers began to see winter as a source of revenue, things changed. This change was not immediate, but slow and steady.

Clients engaged their own legal team to write agreements deferential to them. Fair agreements became a thing of the past. So conwtractors became better educated about what to sign, and what not. Unfortunately, some of this education came at the expense of their own insurance carriers, forcing premiums to skyrocket to compensate for the exorbitant payouts by carriers. At one point, a statistic circulated stating insurance carriers were paying out twice as much as they were bringing into the carriers in premium. Obviously this was an unsustainable dynamic.

Snow contractor became savvier in how they read client-supplied contracts. And, some considerable anxiety flowed as contractors felt they were faced with “sign this or go away” decisions. Do I take on the client-supplied contract with its client-supplied wording that protected the client while throwing contractors to the wolves? Or, do I walk away and let some other unsuspecting snowplower take the hit on this one? What’s a contractor to do?

As the old metonymic adage, originally coined by English author Edward Bulwer-Lytton in 1839, states “The pen is mightier than the sword.” Savvy contractors began learning that a straight-edge and a red pen were an effective tool in defense of the egregiously written snow contract.

Pushed to the limit some contractors began to fight back. Some found their own legal representation with lawyers who were unafraid of what the other side had written. Contractors became educated that the client written contract was not the last word.

So, sales of red pens and rulers began to climb as contractors became bolder in their push-back of the unfair and egregious among the customer/client population. Receipt of a contract agreement from a customer or client is not the end of the sales process. It is the beginning of the actual, true negotiation process. For too long, contractors have been cowed by the almighty customer and their concerted, and often successful, effort to protect themselves and the property owners at the expense of the unsuspecting or uneducated snow contactor.

Strike out those parts of the agreement you don’t like, or your insurance carrier will not live with. The vast majority of the time, the customer or client will understand and ultimately agree with you that the changes are valid, legal and necessary. And, the very worst case scenario I can envision is the client will find other unsuspecting snow contractor to take responsibility for everything under the sun, or moon even if what happens truly is not the contractor’s fault. And, this might be good for you.

John Allin is an industry veteran, consultant and author as well as a regular Snow Magazine contributor.