My employer (now ex-employer) rented my equipment...FOGger's thoughts welcomed

[Naildrivingman]

I was employed by a local construction company from January to mid July of this year. During this period of time I allowed them to use my fairly modest collection of scaffolding. Most of the projects were ones that I was working on directly and I wanted to use the scaffolding not only for my own safety but for increased efficiency in production.  When I used my equipment on projects on which I was directly working I only billed for the time that it took me to assemble and disassemble the scaffolding. I did not bill them for any rental nor did I expect any rental as it was my equipment and it was benefiting me.

My manager approached me about renting my equipment for a job he was bidding. At that time I told them that I would rent my equipment to the company for 50% of the going rate. This was a verbal conversation and nothing was written down.

That project did not materialize, but they asked if my equipment could be used on another project.  I said yes and the scaffolding has been in various states of use of that project since April 1 of this year.

I quit that company in mid July. When I quit, I told them to use the equipment until the project was complete.  Because I quit rather abruptly,  I felt it would be somewhat of a slap in the face to revoke the use of my equipment as well.  They thanked me for allowing the continued use of the equipment and offered to pay me rent upon completion. They asked me for a competitive quote and I gave them one. That quote was 50% of the standard local rental, the same as I had pledged before.

They are now done using my equipment and have offered me $500 for the use of the equipment. 50% of the going rate equals approximately $1750.

You kind folks of the FOG have given me many different opinions I hadn't considered regarding questions that I have posted here and I am grateful for each and every one. I would like to know what you think about this situation.

 

[rst]

No good deed shall go unpunished.  Teach you to be a good guy.

 

[Tinker]

[member=64733]Naildrivingman[/member], My thought, having rented equipment of various descriptions in the past:  If you rent a piece, or pieces, of equipment you receive an itemized list that includes each piece, or the combinations of pieces.  you are charged so much per day/week/month or whatever the term is to be.  You pay a percentage at the beginning of the term before you walk out the door with said equipment. You pay a balance, depending on the term you used that equipment, however the term was determined at the beginning.  You have a receipt telling the terms and the renter has a copy, both copies are signed by both parties. If there is damage, then you pay extra according to an agreed figure before you took the equipment. That, i think, is fair. If you rent to other people, you use the same method.

I have loaned equipment to friends.  I am very careful who I loan to.  If I rent equipment out, I am also very careful.  If I rent equipment, i am willing to sign as above for said rental.  If i rent out equipment, I make sure the agreement is in B&W.  If I loan, it is verbal agreement and I am taking my chances. If it does not work out, and there was nothing in writing, I grab whatever money is offered and run, but never laon or rent to the same party again without a firm and signed agreement.

another thought is that you should have adequate insurance coverage if you are renting equipment out. You are liable for any accidents.  That is a whole new kettle of worms for you to think about. If you are in the business of renting out equipmnt, I don't think you are fully prepared at this time.  Be very careful.
Tinker

 

[charley1968]

How are you and the construction company finacially? If you've the money to spare and they're in a dire straits , i'd consider. If they're well-off and you're poor, i'd sue.

 

[aloysius]

Keep it polite, but firm.  Write a letter stating your version of events, esp. any verbal agreements entered into.  Diary entries stating the facts as understood by you entered on the day of each verbal exchange will help enormously should things get litigious.

Don't get litigious.  Avoid at ALL costs!  Nobody wins but the filthy, stinking lawyers.  If necessary, suggest the use of an independent, unpaid arbiter to help settle the claim.  Make diary entries for each & every exchange in the future.  Even better, state your case in writing and keep dated copies.

Best of luck.

 

[NL-mikkla]

Stick to the 50% going rate deal as stated earlier, kinda slap in the face for wanting it even at a cheaper rate.
It was friendly of you to give them 50% in the first place and now they want even more discount..
I have 16 years of equipment rental experience and there should be no discussing of the rental rates once the job has is finished.

To avoid this situation is to bill them per week, and not at job's end.
This way when the job is done you will have most of your rent in your account.
Keeping it friendly and firm is a good advise, also for future rental projects,
Because that is the best, returning customer who pay a premium price,
The premium price you already gave away, but for 50% of goimng rates they will return.

 

[Tinker]

I notice most of the replies, so far,  come from across one of the big ponds.  All good advise no matter where it comes from.  The main theme is to keep records, records, and records. You have had a good lesson and chalk that up to education. If you don't come to a better agreement, best to walk away, but don't let it happen again. Don't get involved with litigation. It will probably cost you more than you will get back. 

There is an old saying: Fool me once, shame on you.  Fool me twice, shame on me.
Tinker

 

[RKA]

I would say it appears you left on good terms, maybe it's better not to burn this bridge just yet.  Since nothing is in writing and enforceable, the solution probably lies within a conversation - how this all started.  Talk to the manager you made the agreement with and be frank.  Ask him how he came up with $500.  Remind him what he agreed to in case he's fuzzy and let him fill the silence with his justification for the difference or an admission of the mistake.  How you respond depends on the next paragraph.

I'm sure if there was some convoluted reasoning he will provide, perhaps related to your departure.  So before you pick up the phone, decide if it's worth pressing him.  Circumstances may be such that you would rather write it off than sour the relationship (although they kind of did that already).  But if the continued relationship has no value, the conversation ends with the request to pay in full what was agreed upon.

 

[peter halle]

Take the $500 and your equipment and chalk the rest up to doing a favor that turned into a learning experience.  You are lucky to get your equipment back and you are lucky that nobody got hurt using it and you being sued.  Rental businesses have legal contracts to protect themselves.

Peter

 

[Jozsef Kozma]

i have to say , Peters point is the most important
Be happy you got everything back ,nobody got hurt,
and made few $
Don't do it again , liability laws not in your favor

 

[AlexThePalex]

Since everything is verbal, did you actually agree on a set amount of money, or just the vague 50%? Because the last option is open to interpretation, and as others already said, is it worth to sour the relationship over that?

 

[kevinculle]

When you decided to quit you changed your relationship with your employer and your prior verbal agreement between colleagues (which was already pretty shaky) became too vague to enforce or rely on.  When you quit you needed to either agree on the settlement and take your scaffolding or agree on the terms and convert this verbal agreement to a written contract.  I would take whatever you can get and take your scaffolding and chalk it up to life experience.

 

[HarveyWildes]

I'm a little on both sides of the fence.  Start by going to the person that you made the agreement with and remind him of the original agreement.  If that doesn't work, take the $500 and the scaffolding and run and don't look back.  And as mentioned, remember that there is a liability associated with letting other people rent/use your tools.

I don't know about rentals, but I've heard that the liability insurance for things like woodworkers co-ops or open shops is way high.

 

[semenza]

Take the $500 and your equipment and chalk the rest up to doing a favor that turned into a learning experience.  You are lucky to get your equipment back and you are lucky that nobody got hurt using it and you being sued.  Rental businesses have legal contracts to protect themselves.

Peter

This ^^^

    And in my opinion any further involvement or pursuance just opens you up to risk.  EX- maybe someone on the crew did  bang their knee and just didn't bother. But if you go to court ????  Plus you really have nothing enforceable unless there were witnesses that will be on your side but I am betting ...... not. Do you have the scaffold in your possession yet? If not go get it before anything further happens.

Seth

 

[antss]

While I think the advice here is good, I disagree with most of you that this should be chalked up to experience or that ndman should be content with getting his equipment back and not getting sued.

That is simply a cowards reaction AND just condones the manager's behavior.  Which is clear to me that he's out to screw naildrivingman simply becaue he's in adantageous position to do so.  Can't stand for that , and this fella needs to be taught a lesson or he'll continue the behavior.

If you guys were in other professions like accounting, law, or medicine, you wouldn't think twice about trying to collect on an agreement with another member of your profession or a former employer.  Even if you feel that's not the case, we as a society are way to lax about "gentelemen's agreement's" and by not publically calling out welchers we are doing everyone a dis-serivce.

As for souring the relationship - why care ?  Do you really want to deal with someone that's out to screw you from the outset ?

 

[kevinculle]

If you guys were in other professions like accounting, law, or medicine, you wouldn't think twice about trying to collect on an agreement with another member of your profession or a former employer.  Even if you feel that's not the case, we as a society are way to lax about "gentelemen's agreement's" and by not publically calling out welchers we are doing everyone a dis-serivce.

As for souring the relationship - why care ?  Do you really want to deal with someone that's out to screw you from the outset ?

People in accounting, medicine and law do not make it their habit to encumber their property without the benefit of a written contract.  A gentlemen's agreement is exactly what it implies and when one of the gentlemen turns out not to be so there is no agreement as far as the law is concerned unless there are witnesses willing to back it up.  There is no relationship any more and that is the crux of the OP's problem...his exposure on this issue will not pay a lawyer for a day's work and good luck finding a lawyer who wants to litigate a verbal contract.  When you make a mistake that costs you money your 1st priority should be to not throw good money after bad.  If the OP has his wits about him he will focus on getting his scaffolding back, getting whatever money the other "gentleman" will pay, and moving on a wiser man.

 

[aloysius]

I agree.  A contract is a contract - verbal or carved in stone.  However, without validation or proof it becomes a matter of "he said, s/he said".  That's why diary entries can become validating proofs in disputation.  Do I need to spell it out any further?  Whilst I'd never ever suggest retrospective diary entry, it would sure be useful, wouldn't it?

If the 2nd party disputes the terms of the contract, there's little else that can be done toward resolution.  That's where an independent 3rd party arbiter becomes useful.  Both parties to the contract would become bound by this mutually unaffiliated person's arbitration.  It's just about the only way forward to achieve any sort of financial resolution, which will hopefully (but by no means necessarily) fall somewhere between the 2 disputed sums.

The fact that an impasse has been reached makes his course of action the only meaningful way forward.  The alternatives - take the money & run or litigation - means that you're bound to lose otherwise.  My suggested course of action has no intrinsic guarantees either, you my lose here too, but one would hope, & even perhaps naively expect, that natural justice will prevail.

 

[antss]

I make verbal , handshake, and gentleman's agreement all the time with that crowd. Never been taken advantage of.  Once, a banker tried but soon realized it was in his best interest to remain a gentleman. Lawsuits are not the only means to get people to do what's right.

Written contracts are no guarantee of payment either.  Even when you win in court, you still have to collect. And that isn't always easy or certain.  You should protect yourself by all means at your disposal. But , dropping the matter simply because you were ignorant just furthers the cycle of people taking advantage of others.

I didn't get that an "impasse" has been reached.  Nailman, said he was "offered" 1/3 of the contract price and it's implied he turned it down.  Maybe he didn't ; in which case there's really nothing practical for him to do except lick his wounds.  The skilled  negotiater would have said, no, no, no, the rental rate is $3500 - you must have forgotten.

Additionally , this falls well within the realms of small claims court which is inexpensive to file in and does not require paid counsel.  You'd be betting that the company values its reputation more than it values $1200.  That's a good bet unless the "manager"  is the owner too. 

 

[Klemm]

[member=64733]Naildrivingman[/member] - you have nothing to fear from lawyers. Since you're in Minnesota and winter is just a round the corner in your neck of the woods. I've been told it gets so cold in Minnesota that lawyers keep their hands in their own pockets!

But seriously: I feel badly for you because you're obviously a good hearted soul, albeit one who decided, without realizing it at the time, to cross the line from "employee" to venture into the EQUIPMENT RENTAL business for which he has no qualification whatsoever.

Keep in mind the debate here is about the difference between the $ 500.00 the contractor offered and the amount you feel you're owed - i.e.  net $ 1,00.00. Anyway you proceed whether its arbitration or small claims court, look at what you really expect to walk away with at best and at what cost in terms of lost time $$ income not to mention the aggravation.

Your maximum actual recovery by forcing the issue has to be very small in the end. Thank him for the offer he made as a substitute for payment of the agreed amount. Appeal to his conscience and his reputation and settle on something both of you can live with.

In the future: "cobbler stay with your lasts" - go forth and sin no more.
You did gain a valuable lesson in business, though, and no one can take that away from you - not too shabby and may well save much more in the future in a different situation.

"Good judgement comes from bad experience(s)"

Hans

You

 

[Naildrivingman]

Thank you all for your opinions and encouragements.  I have taken all to heart.

My plan is to craft a kindly worded, brief and direct letter outlining the original agreement and then see what comes of it.

At no time was my intention solely to make money, but rather to share my investment with my coworkers (because I was relatively certain that the company would not provide the same security and convenience that my equipment would allow).  It is important to note that I was approached about renting the equipment, not the other way around.  I am/was aware of the potential for liability exposure and the state laws protect me pretty well, so I chose to move ahead.  Never again will I do this with any equipment or tools, the work is not worth the reward.

My main hope going forward is that others can learn from my experience.  Thanks you fellow FOGgers for giving me the benefit of your insight.

Regards,
Chris