The fourth concept in Advocating for Yourself: The Laypersons Guide to Contracts, Scams and Overcharging is Risk. Before I begin negotiating any contract, I assess the risk involved with the deal.

Entering into a contract for a painter to paint a couple rooms in your home has very different risks than hiring a roofer to re-roof your house. If the painter doesn’t do his job, your home structure is not at risk. If the roofer makes mistakes, or doesn’t do the job, your risk is roof leaks that can not only ruin the integrity of your roof, but also result in leaking. Leaking can weaken the structure of your home, as well as having the potential to impact areas with electrical wiring.

If you are approached by an individual to do any work in your home, you do have protections in the law. However, in the absence of a contract, it’s difficult for any judge, or arbitrator to know the contents of your verbal agreement. Memorializing that in a contract, or simply a hand written sheet of paper signed by each will at least be some form of proof of what was discussed.

As you assess the risk, consider if there are any areas of the contract that would leave you exposed to paying more than what you’ve agreed to pay. An example of this would be printers purchased by a company years ago. The customer and supplier heavily negotiated for printers that would go in every customer location. When the printer arrived, they did not have the cable needed to make it function. When the customer went back to the vendor with the issue, the customer was informed that cables where not included in the printer deal and would need to be ordered separately. That customer learned an expensive lesson. From that point forward, the customer started including language that all equipment ordered would include all incidentals necessary to make the equipment function properly.

There are other areas of risk to consider. One example I discuss is renting a moving van, or a rental car. The terms in some of those agreements may be all inclusive, and others may have a base charge with an additional charge for every mile the customer drives. Before booking, always read the terms of the deal, so you know exactly what you are paying.

As you assess risk, consider what may not be clear, such as a contract for services. In the example of the painter, make sure you outline who will be moving the furniture and doing clean up afterwards. Also consider the time frame. If you have no end date agreed to in writing, the painter could take weeks to finish, or leave you with a mess to clean up. Details and clarifications are important. Even the hours worked should be clarified. If you state the painter will work 5 – 8 hours per day, you may want to clarify which hours. If you state the work will be performed between 9:00 and 3:00, clarifications to consider would be something like this: Painter will perform the services in a professional and workmanlike manner between the hours of 9:00 AM and 3:00 PM local time and shall work a minimum of five hours per day. All work must be completed by [insert date]…. This is much clearer, than simply stating a time frame. If your painter shows up at 9:00 in the evening to start work because he is a night owl and does his best work in the middle of the night, you can point to the time frame agreed upon in the contract.

“You can never protect yourself 100%. What you do is protect yourself as much as possible and mitigate risk to an acceptable degree. You can never remove all risk.” -Kevin Mitnick