You may ask yourself why we present this question.
Our reason is to develop an understanding that becomes the very base of an agreement between two parties. This definition applies to almost any construction project. It provides a perspective that insures a healthy position from which to make an agreement on a scope of work and a price to do that work. No agreement can be valid without this understanding. Without this understanding the agreement is faulty and will likely fail.
A successful project is one where the provider has correctly completed a defined scope of work for a client and has received a previously agreed upon payment that satisfies the expectation of the client and allows the provider enough profit to stand behind the quality of his work and his warranty responsibilities afterwards.
Either party should not enter a process of developing an agreement with another party based upon a goal that leaves the other party with an unsatisfactory outcome. This is improper.
The most common problem is a negotiation to bait the other party into doing a scope of work for less than it costs to do it properly. At any time after the consummation and commencement of the agreement, the service provider recognizes he cannot realize a profit in the completion of the project contracted, both parties are burdened instantly with an unspecified level of risk.
There must be a solid framework to request a scope of work from competitive providers, evaluate their submissions, select a provider, clarify expectations, and measure the service provided. We are able to provide that for you, whether you are a homeowner or installer.
Another pitfall is having the client purchase, directly from a supplier, the equipment being installed, and hiring the provider for his installation expertise only. By taking this profit opportunity away from the installation provider and seizing it as a client benefit, the installation provider has no potential gain and the client must assume all responsibilities for start up and warranty work necessary in the installation of the equipment he purchased.
Final Thoughts
Either party in an agreement can only have the risk of loss if it is associated with a profit opportunity. An agreement containing the opportunity for a potential loss without an opportunity for profit is improper and should not be consummated.