The Seminar That Changed My Approach

Years ago, before I got into closets, I was planning to be a residential general contractor. I attended a one-day seminar at a junior college for builders and remodelers. The first question the speaker asked was, “How many people in this room have never been sued?” There were about 150 people there. I raised my hand and looked around. I was the only one.

People asked me, “How long have you been in the business?” I said, “About a year, maybe two.” The speaker told me, “You’re in for a thrill. Here’s how it works: the person with the most facts, figures, and things written down wins. If it turns into a pissing contest between a builder (or closet company) and the owner, it’s a lot of ‘he said ~ she said.’ If it’s not in writing, it doesn’t count. If it is in writing, you’ll win.”

Daily Logs: The Habit That Saved Me

When I became a home builder, I started job site journals. Over about 30 houses, I logged every single day:

• The date and time I arrived on site.

• Weather conditions.

• Who was on the job (which subs).

• What materials had arrived since last visit.

• Any conversations with the owner and subs.

• Every change order and any changes to time, location, schedule or money.

  
  

I wrote it all down and had owners sign and date written change orders. This included changes in cost and estimated additional time added to the project. That documentation saved me.

On one project in 1994, the job was 95% complete when the client abruptly fired me for being “over budget” and “too slow.” I brought out 95 signed change orders, each with costs and time impacts. We sat down with their corporate attorney and my lawyer friend. After a few questions, it was clear: everything they had was from memory and hearsay. Everything I produced was in black and white. In the first fifteen minutes, their attorney realized that if this went to litigation, they’d lose. Documentations won the day..

Why Documentation Matters

If something can go wrong, it will. Your contract is more than the signature page. It should include everything: proposals, drawings, notes, emails, change orders-your entire paper trail. Verbal agreements don’t cut it. When money’s involved, memories change. In court, the person with the best records wins. Good documentation protects you and your client, sets expectations, and eliminates surprises.

The Real Costs of Disputes

• Court costs, attorney fees, expert witnesses, depositions and litigation expenses.

• Potential damages if a judge or jury rules against you.

• Replacement costs for disputed items.

• Lost opportunity caused by consuming your time.

• Damage to your reputation (especially with online social media reviews).

• Higher insurance premiums if damage or accident is involved.

• Credit card chargebacks (money disappears from your account while you defend yourself).

Core Protections You Need in Place

• A clear, signed contract (by both parties).

• Signatures/initials and dates on everything, especially change orders (price, time, scope).

• A CRM or timestamped notes (even a Google Calendar entry) anytime the deal changes.

• Good communication that sets expectations early.

• Proper insurance (liability, workers comp, and consider errors & omissions).

Tip: Train installers to photograph pre-existing damage the moment they arrive and before bringing material into the house. Phone photos have timestamps. If you see a scratched floor or a dinged banister before unloading the truck, document it. This protects you when at new construction sites or major remodels where other subs are at the project at the same time.

Intended Use: Label It or Own It

We once built shelving above a client’s existing antique dresser. Intended use: hats, sweaters, handbags. Two years later it collapsed because they loaded it with books. If we’d known it was for books, we’d have reinforced the shelving and added support. Fortunately, our drawings were labeled for intended use (hats, purses, folded items). No mention of books so we were in the clear.

Same thing can happen in pantries: wall-hung systems designed for cereal boxes and canned goods can fail under heavy weight if china, dishes and crystal. are loaded on. Label your drawings with intended use. It’s not fun, but it can save tens of thousands of dollars, and sometimes your business when they claim you broke their 'priceless' Ming Dynasty vase.

“Industry Standards” (When There Aren’t Many)

Unlike kitchen and bath, our closet industry lacks formal, universal standards. When asked to testify or give a deposition, I explain my interpretation of “industry standards” based on common practice (e.g., 32 mm system logic, reasonable spans, typical hanging heights). If you specify your standards in writing, you control the baseline.

What the Contract Should Say (Highlights)

Designs & Modifications

• You’ll determine needs/wants through client interviews, measurements and existing physical layout.

• You’ll use common industry sizes to keep costs down; customized sizing is available at additional cost.

• You reserve the right to make minor on-site modifications if hidden obstacles, at time of measurements, appear (scuttle holes, outlets, access panels, etc.).

• Backs are not included unless explicitly noted. If clients want backs or trim, it’s an added cost.

• Review the contract line by line at signing. Don’t just say, “Sign here". This prevents misunderstandings.

Payments & Terms (example structure)

• 60% initial payment at contract signing (call it an “initial payment,” not a “deposit”).

• 30% at delivery/start of install. If a CC card is on file, get a signed authorization so it can be processed upon substantial completion that day.

• 10% on final completion/punch list resolution.

• Interest clause: any past-due beyond 15 days accrues 1.5% per month (some places want annualized equivalent stated-check your state/province). If you don’t include this in the contract, you typically can’t charge for it later.

Reality check: Laws vary. For example, California often limits initial 'deposit' for home improvement. Always check state/local rules. You can make exceptions case-by-case, but initial any contract changes.

Punch Lists

• If something is incomplete per the approved drawings/accessories, the client may withhold the final 10% until the punch list is completed.

• Changes/additions made after the contract are handled by change orders and are not grounds to withhold the final 10%.

Scheduling

• You’ll schedule in a timely, mutually agreed way.

• Because certain components are outsourced, schedules may need minor adjustments.

• If the delay is on your side (e.g., a hardware backorder), install what you can and complete the rest-clients typically hold only the last 10%.

Jobsite Preparation (Set This in Writing)

• Unless otherwise agreed in writing, the client handles demo, patching, and painting, before install day.

• You need a clear path and clean area. Move valuables, jewelry trays, watches, watches, etc.

• You are not responsible for personal property.

• You do not unplug or move computers or sensitive equipment. If you do it as a courtesy at the client’s request, you’re not responsible for data loss or damage.

• If you must do demo, it’s billed hourly (price high enough that you’re truly okay doing it-or they’ll hire someone else).

Pets & Safety

• Ask about pets immediately. Doors will open/close, materials are large and heavy, and tripping hazards are real. Keep pets and family member out of the work zone.

Insurance Reality

• General liability typically does not cover accusations of theft. Add crime coverage if your team is in the home. It’s usually inexpensive.

• Ensure workers comp, liability, and vehicle coverage are maintained, and require the client to carry homeowner’s insurance for unforeseen issues (e.g., removing site-built shelving, by others, can reveal a nail plugging a pipe-water that gushes when the cleat is removed).

Work by Others (Framers, Drywall, Paint, Trim)

• Your product is built square, level, and plumb. Houses often aren’t. Define terms:

  • Plumb: perfectly vertical

  • Level: perfectly horizontal

  • Square: 90° corners

  • Concave/Convex: walls bowed inward/outward

  • Warped: twisted surfaces

• You’ll do your best within these conditions. Gaps at walls/trim are common. Offer optional trim packages/caulking at added cost. Remind the client that you are building a closet, not a Swiss watch.

Contingencies

• Acts of God, traffic, weather, and other reasonable delays can happen. You’ll communicate and reschedule as needed.

Signatures

• In most places, both parties must sign for a binding contract. Email acknowledgments can help, but get signatures whenever possible.

Field Examples That Teach the Lesson

• Bathroom vanity scratches: Blamed on us during a major remodel. Height and scratch pattern indicated tool-belt scuffs from electricians installing vanity lights. Our installers don’t wear tool belts; we carried materials in by hand. Documentation and observation mattered.

• Missing accessories in multi-unit builds: People “borrow” baskets and hardware on job sites. Have installers photograph finished installations, especially in vacant or under-construction spaces.

Shelf Spans, Materials, and Then vs. Now

Twenty years ago, melamine/particleboard cores varied widely. Today, suppliers often recommend max shelf spans (e.g., ~32”). Still, Reinforce long spans. Rods typically deflect before failing; shelves above rods are the risk so pay attention to clear spans and loads. Again, what is the intended use?

Interest, Chargebacks, and Why 60/30/10 Works

We moved to 60% / 30% / 10% after getting burned holding too much at the end over minor issues (e.g., a single cross-threaded handle). The final 10% is plenty to motivate completion of small punch items without jeopardizing cash flow or fairness.

Final Word

This isn’t rocket science; it’s disciplined common sense. Write everything down. Label intended use on drawings. Get signatures and initials on changes. Photograph pre-existing conditions. Control the jobsite. Define payment terms and interest. Clarify what’s included (and not). When disputes arise, the side with the organized paper trail usually wins.