Avoiding Lawsuits with Coffee

[Ben J. Gromicko]

Home Inspectors Can Avoid Lawsuits by Including This Clause into Their Inspection Agreement

“Coffee meeting. In the event of a problem, complaint or bad result with the inspection service or report, CLIENT agrees to meet with the President of YOUR COMPANY, INC. for at least one hour (60 minutes) sipping coffee at a local diner without any other counsel or person present. CLIENT agrees to openly communicate in good faith in an attempt to come to a resolution, prior to filing any legal complaint against YOUR COMPANY, INC.”

Why Include This Clause?
I rather spend an hour talking and sipping coffee with a former client instead of spending a lot of time and money seeing a complainant in court. I can’t imagine sitting with someone in a non-confrontational, face-to-face meeting and not being able to come to some sort of understanding and resolution to a problem.

I propose that most complaints that home inspectors deal with stem from their client’s improper expectations or misunderstanding of the inspector’s service. Setting your client’s expectations should be handled prior to agreeing to perform an inspection. If you didn’t do that, then this agreement to meet informally afterwards is your chance to set things straight and avoid litigation.

Emotions can run high and strong words are often used when the method communication is impersonal, such as through email, voicemails, or letters from attorneys. In the least, an informal meeting can calm the situation.

It is unknown whether a court will enforce this type of clause, but a judge may look favorably upon its spirit and intention.

Benefits
The benefits of the “Coffee Meeting” clause include:
·Communication is open and frank
·It costs less than litigation
·It’s less time-consuming
·Relationships might be preserved
·Both parties stay in control

ADRS
Consider the “Coffee Meeting” clause as your own little alternate dispute resolution service. The “Coffee Meeting” provides an excellent opportunity for the following:
·Your client gets to explain the problem experienced with the house;
·Your client gets to explain why they are disappointed in your service;
·You get to explain the service that you provide; and
·You get to determine whether you are responsible for the problem or not.

Plenty of Time
At the 60-minute meeting you and your client both get to work towards a resolution. You have plenty of time to:
·Speak in your own words;
·Review the inspection report;
·Identify and prioritize the problem(s) being experienced;
·Agree to take a second or third look at the property you inspected;
·Read over the Standards of Practice and Scope of the inspection service you provided; and
·Explain why a particular problem your client is experiencing is not your responsibility; or
·Work out a way to make your client whole if it is determined that you are responsible.

What If You Are Responsible?
If you are responsible for the problem your client is experiencing, this meeting provides you time to fashion your own solution, including creative, service-oriented “win-win” options that are not available in a courtroom.

Retain the Option
There is another clause that should include in the agreement that retains the option to arbitrate or litigate if you and your client do not reach an agreement over coffee. If the dispute is not settled during this informal meeting, the process can lay the groundwork for the later resolution of the issues. Even if things progress to formal litigation, this informal meeting can set the stage for that process by narrowing and defining issues, and assisting in the discovery of relevant information.

What Really Matters
In the end, it is not about who is right or wrong, or who wins, but about agreeing to informally work towards a resolution that meets everyone’s needs without involving litigation. One more piece of advice, you buy the coffee.


Want more clauses to insert into your agreement?
http://www.bengromicko.com/home-insp...-gromicko.aspx

[Gary Farnsworth]

Mediation, IMO, would be more appropriate.

[Christopher Currins]

What if they're tea sippers?

[Michael R. Boyett]

Something similar worked for Crowley & Gates

[Scott Gilligan, CMI]

I noticed the same wording in your old Peach Inspections WDI Agreement. I have used it in my contract for a while and always get a chuckle from it whenever a client reaches that paragraph.

I have had some clients in the past that have had unrealistic expectations on what a home inspection is and is not. I perfer to sit down or talk with them on the telephone about things to find out about their concerns before it gets into any kind of legal battle. So far, I have never had a claim and have managed to turn several unrealistic clients into happy ones simply because I spent a little bit of time after they recieved their inspection reports.

Damage control is essential to maintaining a service based company...whether it be your own fault or not.

[Douglas Cossar]

Originally Posted by bgromicko

Home Inspectors Can Avoid Lawsuits by Including This Clause into Their Inspection Agreement


I propose that most complaints that home inspectors deal with stem from their client’s improper expectations or misunderstanding of the inspector’s service. Setting your client’s expectations should be handled prior to agreeing to perform an inspection. If you didn’t do that, then this agreement to meet informally afterwards is your chance to set things straight and avoid litigation.

That is the crux of the matter.

The client must be made to understand the scope and limitations of the inspection right off the bat. It doesen't matter how good an inspector you are, if they think you can see through walls, or predict the future problems may arise.

I always point out significant clauses in the contract and explain them to the client, however, I finsh with:

I'll make you two promises:

1) "I will do the best job I can for you"

2) "I might NOT find every little thing wrong in this house."

Cheers

[Gary Farnsworth]

Correct. Just one of the reasons I do onsite reports, and explain them after I print them off. Explaining the reports/agreements up front and at the end of the inspection before the customer leaves the home can save hours of grief. If the buyer has a question right then and there, you can go back to the defect at that time. Inspectors who send off or e-mail reports are walking a thin line. You really should explain the report to the client ASAP after the inspection. I have been told that my web site contains too much home inspection information. Better too much than not enough. Presenting the customer with Ben's book, and more home maintenance tips and suggestions to the client will cover your back side. Do it now, before anything else comes up later. I do not drink coffee or tea anyway.

[Billy Boerner]

Portion of todays email. I try to manage all my clients expectations right off the bat.

I also offer free wood destroying organism inspections (termites), lateral sewer scopes using a video technology, Radon testing and Roof Certification. WDO, Video Lateral, and Roof Certs are subbed out to highly skilled field technicians within that given trade. All inspectors are coordinated to be onsite at the same time.

You will receive a DVD and report for the lateral sewer and a mandated state report for the WDO. My home inspection report will be available in 24 hours or less once the inspection is complete. I take numerous pictures and video, my reports are narrative and computer generated. My reports list all defects in the summary and the body of the report will have a picture of each defect found. I do not offer onsite reports. You should beware of those that do. You hire us to report on the visible condition of the home. I take my time on site and after by looking back through your pictures. I don't release a report until I'm 100% satisfied. You can view what's inspected and what's not inspected by visiting...
>
> http://www.nachi.org/sop.htm
>
> ??? if you have any questions at all please feel free to contact me anytime day or night. I keep reports on file for five years and I provide free copies if needed. Your privacy is top priority. Under no circumstances will I release your report to any third party to include realtors without your written permission.

[Ben J. Gromicko]

It's one thing to set expectations with your client prior to doing an inspection.

It's another thing to make a legal, binding agreement to meet for one hour AFTER the client experiences a problem related to your inspection.

This clause takes out all FEARS of receiving an attorney's letter in the mail from a disgruntled client. You'll never get one unexpectedly. If you do - you're client has breached the agreement.

You force all future claimants to FIRST "meet and talk" with you.

It's so simple (almost silly at first thought) - YET it's the best thing I've ever done to protect my business.

Other clauses of my agreement and cool stuff are found here.

[Allen L. Catterton]

QUOTE: It's another thing to make a legal, binding agreement to meet for one hour AFTER the client experiences a problem related to your inspection.
This clause takes out all FEARS of receiving an attorney's letter in the mail from a disgruntled client. You'll never get one unexpectedly. If you do - you're client has breached the agreement.
You force all future claimants to FIRST "meet and talk" with you.

That’s a joke? Right? No matter what is in any agreement your client always has redress through an attorney. He/she can exercise that redress at any time and in any manner. The first thing you client’s attorney is going to say to the client is “This guy must be kidding if he thinks I am going to allow you to sit down with a cup of coffee and relinquish all of your rights without any further action (and me not making any money on this deal)”. Lawsuit: any time; any reason; anyone. As far as breaking a contractual agreement, the attorney will simply state that, based on the complaint, the contract has already been broken by the home inspector and the contract/agreement is null and void, just like it was never written. The attorney will argue the facts (or accusations) until he, you and your attorney (which you are paying $350 an hour) are all blue in the face.
Good idea to communicate and present facts to a disgruntled client and try to smooth the waters and it has always worked effectively for me. But putting a Mickey Mouse clause in a contract does not make it binding and does not make it enforceable. You might just as well put a clause in that the client agrees never to file suit against the home inspector. Half the time the client does not read the agreement anyway and they would never know. That still would not cause it to be recognized by any court as a valid, obligatory or compelling contract.

[Ben J. Gromicko]

That's why it's called "AVOIDING" - not preventing.
Read it again. Slower this time.

If an attorney is contacting you about a claimant, you've already LOST!
If you think you're agreement is going to save you in a court - GOOD LUCK!

You have missed the point of the "coffee clause." Coffee clause and the entire agreement.

The point is to persuade/influence your client that there are alternatives to resolving a dispute.

From my own personal experience as an inspector since 1995 - Everyone who has read that clause my agreement, chuckles and acknowledges the apparent "silliness" of it all. While they are signing the agreement, I tell them something like the following:

"If you have a problem with the house when you move in, don't call your attorney - Okay? Call me first. I've been a home inspector for many years. I've earned a reputation of taking care of my clients. If there's a problem, let's work together and resolve it - simply and openly - face to face - over some coffee or somethin'. Okay? I'll buy."

"Okay. I will." is the typical response, while they shake my hand smiling.

So, if you still don't get it.... read it again... seriously... it's one of the best things I've ever come up with. And I'm sharing it with everyone.

[Gary Farnsworth]

It is OK, Ben. We know you are trying to sell something, but these clauses are already in the NACHI agreement. "contact the inspector within 10 days of discovery......."

[Ben J. Gromicko]

Originally Posted by gfarnsworth

It is OK, Ben. We know you are trying to sell something, but these clauses are already in the NACHI agreement. "contact the inspector within 10 days of discovery......."

Yeah - contacted by an attorney within 10 days - HA!
And yes - I sell things.

[Billy Boerner]

Originally Posted by bgromicko

That's why it's called "AVOIDING" - not preventing.
Read it again. Slower this time.

If an attorney is contacting you about a claimant, you've already LOST!
If you think you're agreement is going to save you in a court - GOOD LUCK!

You have missed the point of the "coffee clause." Coffee clause and the entire agreement.

The point is to persuade/influence your client that there are alternatives to resolving a dispute.

From my own personal experience as an inspector since 1995 - Everyone who has read that clause my agreement, chuckles and acknowledges the apparent "silliness" of it all. While they are signing the agreement, I tell them something like the following:

"If you have a problem with the house when you move in, don't call your attorney - Okay? Call me first. I've been a home inspector for many years. I've earned a reputation of taking care of my clients. If there's a problem, let's work together and resolve it - simply and openly - face to face - over some coffee or somethin'. Okay? I'll buy."

"Okay. I will." is the typical response, while they shake my hand smiling.

So, if you still don't get it.... read it again... seriously... it's one of the best things I've ever come up with. And I'm sharing it with everyone.

I see your point Ben however in my opinion I would doubt your inspection abilities if I was your client. I would wonder how many times you had a problem in the past since your worried about being sued.

[Ben J. Gromicko]

Originally Posted by bboerner

I see your point Ben however in my opinion I would doubt your inspection abilities if I was your client. I would wonder how many times you had a problem in the past since your worried about being sued.

Nope. Missed the point.
I'm not worried about being sued - no more than the next inspector. As Gary pointed out - you can't prevent that from happening - anyone can sue you - anytime.

The intention of the clause is to gain your client's attention - directing them towards resolving issues before they progress to their usual destination - to an attorney.

A worried inspector would say something like, "Don't sue me." An intelligent one would say - "Call me first - not your attorney."

When an attorney is involved - BOTH parties lose. The only one that wins is the lawyer.

That's why lawyers do not favor clauses such as the "coffee clause." It takes them out of the equation - no billable hours if two parties agree to resolve their problems out of court. See?