Legal disputes with your clients can be costly, even if you’re ultimately vindicated. Litigation can also tarnish your reputation, no matter what the outcome.
Every contractor wants to avoid losing time and resources that could be better spent on improving operations, completing projects or securing new business opportunities. To mitigate the risk of litigation, smart contractors start to get “choosy” about their clients.
How do you spot a client that’s likely impossible to please and litigation-prone? Here are some major red flags:
1. They have a history of legal disputes (and aren’t shy about it)
Some clients will straight up tell you that they’re likely to sue, usually by talking about all the times in the past when they’ve taken contractors to court for one reason or another. Listen carefully to what they’re saying, and don’t fall into the trap of thinking you’ll be the exception.
2. They have unrealistic expectations about what you can do
A lot of clients are uneducated about the realities of a construction project – but be wary of the one who brushes aside your attempts to adjust their expectations surrounding the timeline, scope of work or budget.
3. They don’t know exactly what they want
If you walk away from the initial consultation with the clear sense that a client doesn’t actually know what they want or have a vision for the project, you may be courting trouble. Only take on this kind of client if you have a firm agreement regarding signed change orders.
4. They tell you that you’re not worth the money
This is the kind of client who scoffs at your estimate and tells you that they know you can probably go cheaper. They have strong (and loud) opinions on the costs associated with a project, and they want you to line-item every expense. They believe that everybody in the industry (even you) is out to cheat them, and that makes them see fault where there is none.
Unfortunately, you may not realize that you’ve landed a problematic client until it’s too late. If you end up in litigation, it’s always wisest to seek experienced legal guidance.