Personal Guarantees

JD Dublin

I am helping a kitchen-fitting company set up personal guarantees for their customers. They have had problems in the past collecting money, and have been given the run-around by many people.

They are looking for something to use to collect their money at the end of a job. They have told me they don't have loads of work on, but they have to be sure that they can collect what work they do have on. They want to set up a system whereby a person looking for a new kitchen basically guarantees to pay.

Ideally someone could point me in the right direction so I could cut and paste a letter of guarantee.

antoinolachtnai

How will a letter of guarantee help get people to pay?

Paulyh

So is company expecting a customer to give a personnal guarentee to ensure payment at the end of the job? Why not just ask for payment upfront?
if i wanted a new kitchen, would I have to put my car or something as guarentee???
A simple signed contract between the company and their customers would hold more weight, if they were having trouble being paid.

JD Dublin

antoinolachtnai wrote: »

How will a letter of guarantee help get people to pay?

Because it means that that person has guaranteed to pay their bills...and I understand is stronger than a contract because in a contract the person who has the kitchen can say 'oh, I wasn't happy about such and such aspect of the kitchen', and they can resist paying the last installment.

This kitchen company is not interested in hoodwinking anyone into paying for what they didn't get. They have been caught for thousands in the past by people who could not or would not pay.

JD Dublin

Paulyh wrote: »

So is company expecting a customer to give a personnal guarentee to ensure payment at the end of the job? Why not just ask for payment upfront?
if i wanted a new kitchen, would I have to put my car or something as guarentee???
A simple signed contract between the company and their customers would hold more weight, if they were having trouble being paid.

They get some money up front, but not it all, theres always a few bob left at the end, sometimes this amounts to hundreds and even thousands of euros.

As in the last reply, a contract is open to being interpreted if the customer is not satisfied etc etc.

antoinolachtnai

JD Dublin wrote: »

Because it means that that person has guaranteed to pay their bills...and I understand is stronger than a contract because in a contract the person who has the kitchen can say 'oh, I wasn't happy about such and such aspect of the kitchen', and they can resist paying the last installment.

This kitchen company is not interested in hoodwinking anyone into paying for what they didn't get. They have been caught for thousands in the past by people who could not or would not pay.

They can still say they weren't happy and still refuse payment, no matter what they have signed.

JD Dublin

antoinolachtnai wrote: »

They can still say they weren't happy and still refuse payment, no matter what they have signed.

Ideally someone could point me in the right direction so I could cut and paste a letter of guarantee.

The kitchen company are looking for the text of a letter - can you help?

antoinolachtnai

No I cannot help. There is no letter you can cut and paste that will help the situation. Your client has misunderstood what a letter of guarantee is. They need legal advice and should seek it from a person who is licensed to give it.

Paulyh

JD Dublin wrote: »

They get some money up front, but not it all, theres always a few bob left at the end, sometimes this amounts to hundreds and even thousands of euros.

As in the last reply, a contract is open to being interpreted if the customer is not satisfied etc etc.

Ah I see, so it would be similar to a construction contract, where the kitchen company is only fitting the kitchen, not selling it. I'm not really sure a personal guarantee would be worth much. You could possibly look at increasing the payment upfront and letting the customer hold a very small portion of the payment, something like retention (in construction) where the client would hold maybe 7%, with half of that (3.5%) paid on completion of any snags etc. and the other 3.5% paid after a certain period, with building works it would be 12 months, but with fitting a kitchen i would say one to three months after any defects (should they arise be resolved).
I'm from a Architecture/construction background, and it is difficult to go after a customer who hasn't paid other than going through the courts for breach of contract, and as you said, its always open for interpretation.
Im trying to think of another solution, maybe a detailed quality checklist could be drawn up and at the end of a job you could go through this with the client and get them to sign off on it, therefore they are accepting the work is done to standard?

JD Dublin

Paulyh wrote: »

Ah I see, so it would be similar to a construction contract, where the kitchen company is only fitting the kitchen, not selling it. I'm not really sure a personal guarantee would be worth much. You could possibly look at increasing the payment upfront and letting the customer hold a very small portion of the payment, something like retention (in construction) where the client would hold maybe 7%, with half of that (3.5%) paid on completion of any snags etc. and the other 3.5% paid after a certain period, with building works it would be 12 months, but with fitting a kitchen i would say one to three months after any defects (should they arise be resolved).
I'm from a Architecture/construction background, and it is difficult to go after a customer who hasn't paid other than going through the courts for breach of contract, and as you said, its always open for interpretation.
Im trying to think of another solution, maybe a detailed quality checklist could be drawn up and at the end of a job you could go through this with the client and get them to sign off on it, therefore they are accepting the work is done to standard?

Yes the detailed quality check has a lot of merit in it. It would limit the issues that can be brought up later. I'll recommend that to them as something that can be done.

Thanks for that.

JD Dublin

antoinolachtnai wrote: »

No I cannot help. There is no letter you can cut and paste that will help the situation. Your client has misunderstood what a letter of guarantee is. They need legal advice and should seek it from a person who is licensed to give it.

Thanks, but I am not looking for legal advice here, merely a copy of what someone else may have on file or can point me to.

Why re-invent the wheel and all those other clichés, eh?

BTW do you have to be licenced to give legal advice? That'd silence half the bars and lounges in the country then.:pac::pac::pac:

SerialComplaint

JD Dublin wrote: »

Thanks, but I am not looking for legal advice here, merely a copy of what someone else may have on file or can point me to.

Why re-invent the wheel and all those other clichés, eh?

BTW do you have to be licenced to give legal advice? That'd silence half the bars and lounges in the country then.:pac::pac::pac:

Is the kitchen company paying you for your assistance?

TheCostumeShop.ie: Ronan

OP doesn't mean actually mean "Letter of Guarantee" in the businesses sense guys. He means a contract which is very normal for anyone undertaking work of this nature. Properly written contracts are not open to interpretation, they are precise and exact. That is why you need to go see a solicitor and get an air tight legal contract. DIY legal work is rarely a good idea for someone without indept legal knowledge. A contract should lay out clearly what you are going to deliver and when, then both parties sign off on it.

However it is still normal practice for work in this situation to be paid at least partially upfront to cover materials etc.

JD Dublin

TheCostumeShop.ie: Ronan wrote: »

OP doesn't mean actually mean "Letter of Guarantee" in the businesses sense guys. He means a contract which is very normal for anyone undertaking work of this nature. Properly written contracts are not open to interpretation, they are precise and exact. That is why you need to go see a solicitor and get an air tight legal contract. DIY legal work is rarely a good idea for someone without indept legal knowledge. A contract should lay out clearly what you are going to deliver and when, then both parties sign off on it.

However it is still normal practice for work in this situation to be paid at least partially upfront to cover materials etc.

thanks for that, they don't have the money to pay a solicitor to draw up a contract, probably cost thousands which they don't have. Your advice is correct, but too costly to follow at this time.

TheCostumeShop.ie: Ronan

It wont cost thousands and it sounds like they can't afford not to, especially if they are entering into contracts that arent binding and therefore they dont get paid.

antoinolachtnai

I don't think they need any fancy legal work done. If they give a quotation, get a signed purchase order, get the delivery note signed at the end of each stage of the job, and issue an invoice at the end for the same amount as the purchase order, that is the contract. You don't really need anything more than that to go to court and collect. You could put a few fancy things into a contract, but it's not going to really help the OP's client/friend get paid in full.

Of course, at the end, they have to be prepared to go to Court to actually collect. If that is beyond their means, you still have a problem.

If this is happening consistently, I would say that there is either a quality problem with the product, or else the guy is attracting the wrong kinds of customers. The word may have gone around that he doesn't need to be paid in full, and that's not too good either.

TheCostumeShop.ie: Ronan

antoinolachtnai wrote: »

I don't think they need any fancy legal work done.

It doesnt need to be "fancy" but it does need to be unique as the product they are selling cannot be fully seen or demonstrated to the customer until the work is completed and at that time it seems to be a case of them not being will to pay based on expectations not be enforceable met.

It's likely the people who enter the contract as is know its not enforceable and therefore on occasion choose not to pay. Contracts, partial upfront payments etc will cut this down dramatically.

DubTony

I'm intrigued by this. The last time I bought a kitchen, the price included fitting. Why doesn't the kitchen seller build in the cost of fitting into the price? That'd save all the hassle.