Things to consider
Some important things to consider when planning an installation
Find the right product by shopping about. Kitchens, bedrooms and bathrooms range in price, functionality, durability and purpose.
Design is crucial – We recommend a home visit by the designer or installer in every instance. It will be the foundation to a successful project!
Consider the options. Do you use the retailers installers or find one yourself. Make sure you fully explore all the options before making a decision.
Budget realistically. We often see consumers try to save money when it comes to installation. Our advice: Don’t – you’ll be disappointed if you do!
Have a contingency pot. We recommend that consumers have access to contingency fund for unforeseen circumstances. We suggest an extra 20%.
Find a professional installer. This person will be responsible for turning your design into reality. Consider 2-3 quotes for the work before committing.
Agree timelines. This is key. When will the installation start, how long is it anticipated to take and when will it be completed.
Agree payments. How much, when and how payment will be made. We advise not to pay the entire balance in advance. Consider staged payments (see below).
Enter a written contract. Do not start a project without a formal contract. BiKBBI members have access to these, but some advice is provided below.
Make sure the foundations are strong with a written contract:
Make sure you enter a written agreement
It is vital that buyers and sellers enter a formal agreement, especially when the provision of service is involved. It’s important that:
– Installers are clear about the service they are being asked to complete; and
– Consumers know what they are getting for their investment.
This section details the suggested content for a written contract for kitchen, bedroom and bathroom installation, however BiKBBI provides its members with access to an approved contract which covers most installation projects.
Alternatively, ask a solicitor to draft a contract for you.
Drafting a contract – where to begin
Where possible, it is best to use a contract that is customised to the profession or industry, as this will include terms that are relevant to the work the installer does. Generic contracts are better than nothing, but not as clear as a tailor made agreement.
Installers and customers are welcome to use this guide to consider all aspects of a contract. It may assist you to draft your own or negotiate a better deal in a contract that is provided to you by the other party. This is advice though – for clear legal guidance it is suggested that both parties seek independent legal advice from a legal professional.
Contract language does not need to be complicated or legalistic. In fact the simpler and plainer the language, the more easily the contract can be understood.
Misunderstandings will also be less likely. If you use a solicitor to draft a contract, ask them to use simple, plain English and ask them to explain anything that you don’t understand.
Tip: Contracts often use language such as ‘the principal’ and ‘the contractor’. This is often done for convenience in writing standard form contracts. However, you might find it simpler to use the consumer and the installer name.
So what should a contract include?
1. The parties
All written contracts between consumers and installers should include some basic information about each party (the parties to the contract).
Names and business addresses:
As a consumer, know who you are contracting with – is it a company, partnership or individual? This will be important if there is a dispute during the contract period and you need to go to court. Understanding exactly who you are contracting with will also better allow you to assess the risks of entering into the contract and to locate relevant information about the other party.
Make sure addresses are included within the contract – not just phone numbers / email addresses – You may want to verify addresses either via Companies House or by checking formal identification of the installer. BiKBBI members are identified as part of our entry criteria.
2. Description of services
Every contract should include a description of the agreed work to be undertaken or the result to be achieved. This should be as detailed as necessary to make it clear to both parties.
It should include:
– What work will be undertaken or what result will be achieved; and
– When the work will start and when it will be completed (specific dates); and
– Where the work will be undertaken (the site address).
It should also include a bill of materials – A list of items that is required to complete the installation, together with who is responsible for supplying them.
Whilst consumers may be able to get materials cheaper, we recommend that this is left to the installer as they are best placed to order what’s needed.
This is a very important part of the agreement and often where disputes begin.
Payment is something that should be discussed and agreed in writing prior to work commencing. We also recommend that payments are not made in cash. An audit trail of all transactions provides great protection for both parties. We recommend payments be made:
– By credit or debit card;
– By bank transfer;
– By secure third party provision (such as an ESCROW).
The Consumer Rights Act (2015) clearly references ‘unfair’ terms in relation to payments and suggests that neither party should be liable for full financial risk.
Therefore it’s suggested that payments are made in stages:
– A deposit to confirm the appointment;
– An interim payment / payments at stages during the installation; and
– A balance payment on completion.
What may also be considered if payment is required in full, in advance include:
– An ESCROW protected payment; or
– An Insurance Backed Guarantee (IBG).
The contract should set out:
– The amount;
– Timing of payments; and
– How expenses will be handled.
These are discussed in more detail below.
The two most widely used methods of payment are fixed fees and hourly or daily rates. Details about how these fees are calculated should be clearly set out in the contract.
Sometimes installers will be paid a single, fixed fee to perform an entire job. If the contract is long term, it may be worth including a clause in the contract that enables fees to be reviewed if business costs increase – but this is unlikely / unnecessary in most kitchen, bedroom & bathroom installations, as they’re normally only undertaken over a few weeks.
Hourly or daily rate:
If installers are getting paid according to the number of hours or days they work, the contract should state how many hours make up a standard working day (you may also wish to specify how many days a week will be worked). It should also set out the fees that are payable for one hour’s work and/or one day’s work. The contract should always state whether VAT is included in the fee.
Contracts that specify hourly or daily rates often require monthly payments.
Expenses dealt with in a contract may include items such as travel, parking, tolls and congestion charging.
The contract should specify whether the customer:
– Will pay for expenses while the installer is performing the contract; or
– Will provide the installer with supplies that are necessary for the work to be performed.
A relevant example is parking:
– Does the installer pay, then charge the customer? or
– Does the customer provide a permit?
5. Intellectual property
A contract may require an installer to create something, like a software program, a document or a plan for a house. However, the creator of intellectual property is not always the owner. The owner will have certain rights (called ‘intellectual property rights’) that will allow them to license or sell the creation. The owner may also be able to stop other people from making money out of those creations, even the creator.
An independent installer will automatically own any intellectual property in the works, articles or inventions they produce, such as copyright. If the consumer wants to own the intellectual property they create, this must be specifically outlined in the contract. It is advisable to first seek legal advice about clauses that give intellectual property rights to the customer.
If installers want to retain control over their confidential information (for example, customer lists, pricing information or other ‘trade secrets’, the contract should include a clause to protect that information.
It can also specify the type of information that is confidential, so that both parties understand exactly what needs to be protected (for example, ‘information regarding the contractor’s profit margins’).
A contract may include an ‘indemnity’ clause. In an independent contracting arrangement, this is usually a promise the installer makes to the customer to accept the risk of loss or damage that the customer may suffer as a result of installation work. Indemnity clauses are usually about shifting risk from the customer to the installer. However, it may also state that installers are not liable for risks or losses that the customer has control over.
While risk is an essential consideration in all contracts, installers should carefully consider whether the risk which is being taking on by agreeing to an indemnity clause is within their control. If it is outside their control, (for example, if the indemnity also applies to work performed by subcontractors), the installer may need to get professional advice before they sign.
For people working in certain professions (such as accountants, architects, lawyers or builders), where advice and expertise are central to the performance of the contract, indemnities and indemnity insurance can be a normal part of doing business. It is important that installers understand exactly what responsibility an indemnity clause imposes on them. Professional indemnity insurance is strongly advised for a contract that contains an indemnity clause.
Commercial insurance is pivotal for installers carrying out work in customers homes. It protects both parties from financial loss in the case of accidental damage.
All BiKBBI members maintain valid Public Liability Insurance policies, with a minimum level of protection of no less than £2m indemnity. This level is sufficient for most refurbishment projects, however raising the level of protection should be considered in certain circumstances, such as work in Grade Listed Buildings.
The insurance obligations of each party should be clearly identified in the contract and a copy of the policy can be attached to the contract as an appendix.
Professional indemnity insurance is most often used by independent contractors who have expertise in a particular service. For example, installers may take out this type of insurance to cover against their work becoming unsafe, or if advice is given that results in a loss to the customer.
Sometimes installers may need to engage a subcontractor to assist in the delivery of the installation project. In our industry, it is common practice that installers utilise the professional services of subcontracted gas and electrical engineers as well as licensed waste removal agents – as these elements are specialist in nature and regulated in law.
Be sure that installers discuss the possibility of subcontracting work with the customer and ensure details are included within the contract.
Some customers will allow installers to subcontract part, but not all, of the services. The customer may wish to specify what work may be subcontracted or place other restrictions in the contract. Alternatively, some customers will insist that the installer personally do the work and not allow them to subcontract.
If installers do use a subcontractor, they will still be responsible for any work performed by the subcontractor, unless this is stipulated within the contract.
Remember that if the installer subcontracts the work, they will enter into a contract with the subcontractor as their customer, even if it is not a written agreement. It is best to have written contracts with subcontractors for the same reasons that installers have one with their customers.
Customers will need to be aware of their obligations to the subcontractor. Depending on the particular circumstances of their relationship with the subcontractor, they may have obligations in relation to superannuation and workers’ compensation among other things.
10. Responsibility for faulty or incomplete work
A ‘responsibility for faulty or incomplete work’ clause should be included to make clear who is responsible for fixing any faulty or incomplete work and the time frame for that responsibility. Know your legal rights!
This type of clause is particularly common in the building and construction industry where independent contractors may use many subcontractors to complete a task or project. The clause may also stipulate that the customer has to provide the installer with a ‘notice to remedy a breach’ to give the contractor the opportunity to fix the fault or complete the work before they could seek remedies for a breach of the contract.
The Consumer Rights Act (2015) states, amongst other points, that an installer should be given an opportunity to put right any issues – but consumers should seek legal advice on this point if they are unsure of their rights.
Visit our Encountering Problems page for advice on how to handle installation related issues.
11. Procedure for settling disputes
It is good practice for all contracts to include a procedure for settling any disputes that may occur. Disputes could be over matters such as money, work performance or unfairness.
You may want to include an escalation process that includes:
– Discussion with the installer;
– Formal written notification;
– Request for formal site meetings.
Visit our Disputes page for further guidance.
12. Dispute resolution clause
It is good practice to outline a dispute resolution procedure in contracts. This is usually referred to as a ‘dispute resolution clause’. A dispute resolution procedure may require installers to take the following steps before legal proceedings can begin:
– Provide the other party with a written notice setting out the nature of the dispute; and
– Discussions with the other party (directly or through representatives) within five days of receiving written notice; and
– Reference to an Alternative Dispute Resolution (ADR) practitioner for mediation, conciliation or arbitration.
The dispute resolution clause should also name an organisation that will appoint an ADR practitioner if both parties cannot agree on one. The British Institute of Kitchen, Bedroom & Bathroom Installation recommend The Dispute Resolution Ombudsman as a proven practitioner of ADR provision within the furniture industry.
It is important to insist that the ADR practitioner is qualified and currently registered as an ADR practitioner. Similarly, if installers work in an industry where the opinion of an expert is required from time to time to help resolve a dispute, they may decide to include an expert determination clause. This may include similar information to the dispute resolution clause.
These processes allow the installer and the customer to try to resolve a dispute quickly and cheaply in a manner that ensures that both parties can continue to do business with each other.
To reduce the cost of resolving a dispute, the contract should state that any costs associated with the dispute resolution process will be split evenly between both parties. Include specific timeframes in a dispute resolution or expert determination clause to avoid the process dragging on.
BiKBBI provides an independent inspection services for members (& non-members). This can be included as a pre-ADR proceeding that can determine the status of workmanship, but will not determine whether the contract has been fulfilled.
A ‘variation’ is simply a change to a contract that is already in place. This is common in contracts that cover a long period. For example, the price of materials may increase or the result to be achieved may change. If both parties agree to a variation, a court can enforce it. It is common for contract changes to occur verbally, but it is important that both parties keep written records of any changes.
If the installer and the customer agree to vary a term of the contract, the variation should be put in writing and signed by both parties. The best way of documenting a variation may depend on the nature and detail of the variation—for example:
– A separate document detailing the agreed variation. This document should refer to the date of the original contract, the parties names and any other important details that will identify the original contract. It should clearly set out the agreed changes to the contract. It should be signed and dated by both parties. Copies of the variation should be attached to both copies of the original contract.
– A handwritten variation to the relevant section of the installer copy and the customers copy of the contract. Changes should be signed or initialled and dated by both parties. This type of variation may be used if the change involves an amount or the inclusion or deletion of a few words.
– A confirmation email or letter and a response from the customer that shows that both agreed to the variation. This should be attached to the installers copy of the contract.
Contracts often contain a clause for the parties to vary the contract by mutual agreement. Installers should not agree to a term that allows only one party to decide to change the description of the work. Think carefully about the conditions that are placed on agreeing to a variation term because it can affect costs or the installers ability to complete the work on time.
14. Early termination
A contract can state when one party can end, or ‘terminate’, the contract, even if the contract has not been completed.
15. Schedule of work
This should include an estimated timeline of work.
When will work be started, in what order and when is it likely to be completed.
Include reference to unforeseen circumstances and potential for delays to project completion. Sone customers may wish to include penalty for late completion, especially if a delayed completion will have an effect of subsequent building work.
16. Unforeseen circumstances
It is not uncommon for refurbishment projects to meet unforeseen circumstances.
These could include:
– Sub-level structural defects not identified at the point of estimating;
– Gas / electrical / plumbing issues discovered after the removal of the old product; and
– Discovery of asbestos
It is therefore important that the contracts includes this circumstances, who is responsible for resolution, whether it will include additional costs and whether it will delay the completion of the project.
In most instances the customer would be responsible for any unforeseen circumstances, unless it is deemed beyond reasonable doubt that the installer should have been aware, or was responsible for the situation.
A written contract is only valid if both the installer and customer signs and dates the document.
It should be:
– Signed; and
– Printed name; and