Grab your popcorn for this one are contingency agreements.
Enforceable.
I've been getting this question a lot.
I've responded in the comments by the way.
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Welcome or welcome back.
My name is Adam Benjamin, and today I'm gonna open the can of
worms on contingency agreements.
And if they're enforceable, I'd like to hear your input on this as well.
Listen, I learned regularly every single training I run.
I learned from people who are there including brand new reps.
I'm going to share my experience in this video, my learnings, in
my point of view, whether you agree or disagree is totally fine.
All I ask is that you be cognizant and respectful of
supporting the growth of others.
And if not, that's okay too.
You can keyboard command to a way, and I'm sure people will be entertained.
All right, now let's get to it.
Our contingency agreements, enforceable.
First part of this, it depends on who.
You ask, what I'd like to do first is lay the foundation of what a
contingency agreement is and why it is used before we get caught in the weeds.
Excuse me, about the legal side.
So what is the contingency agreement?
Contingency agreement is essentially a glorified handshake that says we're
going to get your roof approved or help you get it approved by the insurance.
And if it is, we get to do the work cool.
That's the contingency agreement.
Now in a playlist, I've done, which I'm going to make really
easy for you to get off.
If you click on the link in the description for the pitch, like a pro
roofing sales training video library, or you can go to the roof, strategist.com.
It'll bring you right to this page in here in my pitch, like a pro roofing
sales training video library, I've done an entire playlist, which you can click
and binge through on the contingency agreement and its use as a closing.
Now I highly recommend you check that out.
And again, it's available for free@theruthstrategist.com or
you can click the link in the video or podcast description.
The reason I bring that up is it's my belief that the contingency
agreement is first a closing tool.
Okay.
Now what do I mean by that?
It is a way to lock in the deal, have that handshake say, we're going to do this
work for you, and we're going to be the contractor of choice to actually do the.
Next it is again, contingent upon approval.
Meaning if the insurance company says no.
We're not replacing it.
They don't owe you anything.
So it removes a risk.
Okay.
So contingent upon approval.
And I've done another video a couple of weeks back on risk reversal by removing
people's fear of signing the thing.
And when used as.
Closing tool in, um, contingent upon approval to, to use risk reversal.
We end up earning more business.
So what it is not quite yet is a contract.
Okay.
It is not yet a contract by law.
And again, this is where, uh, if you're every state law is different.
Okay.
And if you disagree with this or your legal counsel has been
different, drop a comment.
But my understanding is it's not a contract until money changes.
Now you go through and do this work.
Yeah.
It's not billable.
All right.
So if they cancel on you, it's not a contract yet until money changes hands.
So here's where it gets interesting.
Most people on their contingency agreement have a 10 to 20% cancellation,
meaning let's say we get the insurance company approved for $10,000 roof.
We have a 20% cancellation.
If you decided to work with someone else, it's on the fine
print on the back or on the front.
And if you back out, you owe us 2000.
Okay.
Now let's loop back to the, is it enforceable number
one, depends who you ask.
Now let's get into the weeds.
In my opinion, the number one reason to have a contingency agreement
is to act as a closing tool.
Our particular attorney wanted it to be 900.
Federal myself, homeowners season nine pages are going to think they're signing
their entire life away in their firstborn.
We're never going to get deal sign on this.
So we made a decision as a company to say, I'm more interested in this
acting as a closing tool to help us secure deals in lock in deals on
good faith, because we will earn the business than I am of having it be.
Bulletproof.
So we elected for a single one page contingency.
That was double-sided the terms for, for them.
And then all the fine print on the back.
What this allowed us to do was increase the volume of people who were excited
to sign it because of how we positioned it, which by the way I teach in that
free video library, the pitch like a pro roofing sales stream, video library.
And if you want to learn like my whole in-home sales system, I do that.
My program called the roofing sales success formula, which is
an all-in-one sales training, sales strategy and sales system.
That's being used by thousands as we speak from the smallest companies that
started yesterday to some of the top hundred roofing companies in America.
And it plans for individual reps or for owners with a team.
And in my closing strategy, which I cover for storm and retail, I discuss
how to position the contingency agreement as the closing tool.
And I teach the entire process now.
There is a sample contingency agreement included in my program.
Uh, but I just want to be crystal clear.
It is a sample cause every state law is different.
Some company or some states say, you know, your cancellation clause
has to be in this type font.
This typeface this size on the first page with this number of days,
the next one has it differently.
So you just got to make sure that you're compliant with your local laws now.
So let's get back to it.
Number one, main mission act as a closing tool.
Number two.
Question is it enforceable?
I saw a comment on one of the videos and someone said, Hey,
it is according to my attorney.
And the reality is it depends on your contingency.
If you have everything listed out, could it be enforceable?
The answer is, yes.
My next question to you is this, is it worth going in?
Do you know what an attorney is going to cost you?
If you have a cancellation and you're going to collect 20%,
here's what most people do.
Most of the people that I work with will send an invoice for this 20%.
Okay.
The last company I trained, it's funny, we actually talked about this.
They send invoice.
I had done this.
I did in fact, collect this on a commercial project I did when the property
owner decided last minute, not to do the work because he needed the money
and we collected that 20% cancellation.
There are times if you see shaky feet with people, you can communicate this.
Okay.
Now what happens?
You send the invoice.
Some people will pay it.
It is true.
They will.
And there are other people that won't now let's say at 20%, uh, if you have
a, a $15,000 roof, you're going to collect 30 grand or excuse me, $3,000.
Someone double check my math and horrible at it, but you can drop a
link in or drop a comment in my maths.
So you can collect three grand.
By the time you invest all of your time, energy, resources, and effort to
collect your job file, submit it to the attorney, pay your attorney's fees, have
them chase the homeowner in for all of your emotional energy to go into it.
My guests, if you are lucky, you may get paid and you might make $1,500.
Versus reallocating all those time and resources to just go find a customer
you actually want to serve and let bygones be bygones, because let me
tell you this principle is expensive.
And the other threat that you have is that by pursuing the legality
side of the contract means your contract must be buttoned up.
I ended up in an, in an arbitration with a customer and his attorney, even
though this was not the cause they thought that we damaged the gutters,
which we didn't I had before pictures.
He signed off.
It's a story for another day.
The attorney thought we doctored the pictures we literally had before
pictures and after pictures and the gutters were damaged in both.
He'd signed off on them.
They were timestamped his attorney, this absolute, I'm going to say it.
Total slime ball attorney literally says to me, those pictures were doctored.
So what do I do?
I started laughing and then I realized he was serious.
And then Mr.
Slimeball attorney starts diverting all this attention about the gutter
damage to the terms of our contract and pokes holes in all of these different.
Now, the funny thing is this was an $800 discrepancy that I ended up solving by
kicking both attorneys out of the room and having a man to man with the gentleman
sitting across the table from me.
And we got it solved right there.
Did I get what was due and right.
No, but principle is expensive and he was willing to drag his feet
with his little contingency lawyer.
Poking holes at all this, for hopes of some massive thing to just say, we'll
eat the 800 bucks to be done because he was ready to take this thing to court.
Principle is expensive.
So I want to wrap this up with an action plan for you.
I'm going to give you my perfect.
Uh, feedback and you can run with this or not.
In my opinion, number one, contingency agreements should be positioned
as a closing tool and it should be advantageous for the homeowner
because you will sign more deals.
I'd rather sign 20% more deals because the contingency agreement is
positioned and communicated the right.
And lose a couple rather than making it bulletproofs and no one can back
out and screw me over and I'm just going to be a grump ball and I'm going
to make sure they're Bulletproof.
And what will happen is you're going to sign less deals because homeowners
are going to look through that.
It'd be scared.
So I would rather deal with that.
The next.
First course of action is to send the invoice in compliance with
the cancellation details of your contingency agreement in some people,
by the way, do teach that you can review this with the homeowner.
So they're aware of that.
Penalty.
So you do lock that deal in, send the invoice.
Many people will pay it some won't.
You can always of course follow up with a phone call and then it is up to you.
Should you choose to go the legal route?
I'll tell you mine, unless it was an absolute monster project, a
commercial project, unless we had exorbitant amount of time, energy and
resources getting something approved.
That is the only time.
And there were a couple of them that we did that for, but
it's a very selective position.
Otherwise to me.
Friends out there and to owners.
Remember sign more deals.
Principle is expensive.
Send that invoice, move on and go sign a customer that you are meant to serve.
Hey, thanks for joining me in today's video.
If you haven't yet done it, I'd love for you to join me, to learn more
about this contingency agreement, how to position it as a closing tool.
And you can do that for free and my pitch like a pro roofing
sales training video library.
And if you want.
I'd love to chat with you, or you can chat with my team about our all-in-one
sales training, sales strategy and sales system to learn the entire system
to rock it out with your homeowners.
All right, there's a link in the description below.
You can always give us a call at (303) 222-7133 color text, and I
will see you on the next video.