One of the major mistakes made by many in the restoration process is by not having a written agreement or a contract signed by both parties (the car owner and shop) to undertake a car/truck restoration project. This early error can cause the process to become a very miserable project.
Many Owners’ turn over to restoration shops the car and thousands of dollars in deposit money without a record of the business they intend to transact. For the unsuspecting this causes quite a bit of grief, especially when dealing with the not so reputable restoration shops.
Early in the process of researching a shop, get a copy of their written agreement or a contract, and have your attorney review it for your protection. Getting the proper paperwork tells you a lot about the shop you are dealing with.
The following is a typical and generic form that is used by shops in similar forms which gives the shop a lot of rights and the car owners very limited recourse. I have also listed possible contract additions that you should request as the whole process from costs to conditions can be negotiated with reputable shops.
Examples of Restoration Contract or Agreement
Thank you for choosing The Restoration Shop (“Shop”) for the restoration of your collectible vehicle. It is our desire that the process of restoring your vehicle will be an enjoyable and satisfying one. The owner of the subject vehicle is referred to in this agreement as “the Vehicle Owner” or “You.” The vehicle which is the subject of the restoration referred to in this Agreement is a [insert date and model and VIN number] (“the Vehicle”).
In order to provide guidance for the process of restoring automobiles for our customers, the following policies have been developed to minimize ambiguities during the restoration:
1.) Because of the comprehensive nature of the restoration process, estimates or “bids” of the total cost of a restoration project cannot be given at any time. It is most important that this be understood and accepted. If You would like us to ball-park what we think the restoration will entail, we will be happy to do that, but in no way will that figure affect the total price of your restoration. The Shop will not be bound by any such “ball parking” of the costs due to variables which may not be apparent prior to work commencing on the restoration. If You have any questions, please don’t hesitate to ask them.
2.) A $1,000 deposit is required at the time of the signing of this agreement and scheduling to have the Vehicle shipped to our facility to await the commencement of the work to be done.
3.) In addition, a $ 5,000.00 “draw” (roughly the equivalent (_50_ Hours) at our shop rate of $100.00/hour) is required at the time of commencement of the restoration. This draw will be applied to work performed, parts, and materials consumed until it is depleted. Additional draws will be required when the prior draw is worked down to $1,500.00 or less. This system of placing and replacing draws will be used throughout the course of the restoration, until the completion of work.
4.) Our labor rates are:
$100.00 per hour for restorations (Body & Mechanics)
Parts, sublets, and materials will be subject to a mark- up of 25% of Shop cost
All charges paid via credit card will incur an additional processing fee of 4%
Rates are good for 24 months from the start of restoration; restorations extended through customer “hold” will be subject to any increases in hourly rate.
5.) Invoices reflecting work performed and the amount of your draw used will be emailed to you on or about the completion of every 100 Hours of labor performed. In the event of a balance due on your account, additional work will cease and will wait on the new draw.
In the event You initiate a temporary “hold” on work, a $50.00 per day storage fee will be assessed until a new draw is received with a one (1) month minimum fee. Storage fees may also accrue seven (7) days after notification of the completion of the restoration project.
A photo record of work performed for the month will be provided at the end of each month.
6.) Restoration charges apply to “time and materials”. It is understood that quality, comprehensive restorations of collectible vehicles take time. All time spent on projects is documented by a work log. A list of parts and materials used within the billing cycle will be included in the invoice.
Invoices will include an item titled generically as “Shop Supplies”, which will include such items as rags, tape, paper, and etc. not itemized above. These items are impossible to quantify but are clearly related to the cost of restoration. This cost will be 1% of the labor cost of the current invoice, with the minimum charge being $5.00.
7.) Insurance on the Vehicle while in possession of Shop is the sole responsibility of the Vehicle Owner of the vehicle. The Shop will not maintain any insurance for the benefit of the Vehicle Owner or any third party.
8.) The Vehicle Owner may at any time remove the vehicle upon payment of all outstanding invoices and a signed statement that the owner has directed that no further work be performed on the vehicle. Vehicles are not released until account balances are paid in full.
9.) Past due accounts (30 days) are subject to a service charge of 1% per month. Vehicle Owner will be responsible for all legal fees/costs associated with the collection of past due accounts.
10.) Vehicle Owner assures Shop that the Vehicle is titled in Vehicle Owner’s name as the legal owner of the vehicle. You will be responsible for the improvements made to the Vehicle even if you have not assured us you possess clear title to the Vehicle. Shop may require that Vehicle Owner provide proof of ownership at any time.
11.) Shop will not be responsible for faulty, altered or removed Vin tags. It is the Vehicle Owner’s responsibility to verify Vin info before restoration. Shop will not alter, add, or modify Vin tags.
12.) Shop is not responsible for loss or damage to the Vehicle and/or to any articles left in the Vehicles in case of fire, theft, or any cause beyond the control of the Shop, including Acts of God.
13.) You hereby give Shop permission to use photos of the restoration performed to the Vehicle, along with Your name, city, state, and country in their catalogs, website, and in any other promotional material
14.) If You have any questions or concerns about this agreement, please feel free to contact us at _________________
The undersigned Vehicle Owner hereby authorizes the required repair and restoration work to be completed to the Vehicle along with necessary materials. The undersigned hereby grants Shop and Shop’s employees/agents and representatives permission to operate the Vehicle on any street, highway, or elsewhere for the purpose of testing and inspection of the Vehicle.
Signed:_______________________________________ Vehicle Owner
_______________________________________Sho
Date: ___________________________
Vehicle: ________________________
VIN #: __________________________
Some Sections Not Included, but Should Be Negotiated into an Agreement
A.) Shop agrees to return to Vehicle Owner all unused and original parts prior to last payment
B.) Shop agrees to continually work on the vehicle once the car is delivered to the shop and deposit is made
C.) Shop agrees not to store the vehicle outside once restoration work commenced
D.) Shop agrees to provide documentation to support labor hours worked and parts purchases if Vehicle Owner requests
E.) Penalties for breach of Agreement by the Shop
F.)The Shop will label, track, and store all Vehicle parts in an area accessible to Vehicle Owner for inspection
Without a written agreement or a contract your car could be headed here:
Or with a written contract your car could be here:
There are no guarantees either way, but doing your research and getting a written contract goes a long way toward protecting you and your project.
As my grandfather always told me “Measure Twice and Cut Once” so do your homework, take your time, and make sure the paperwork is complete before moving forward.
Remember have an attorney review any agreements or a contract before you sign anything!
Thank you so much for this information. Me and my wife are planning on having a 64 1/2 Mustang restored, and your article will help us to get the project started.
Dana B.