A Contractors Guide To Increasing Accounts Receivable, Part 2 In the last issue, (Roofing Contractor, April 2000), writing a demand letter and stopping work on a project for non-payment based on a contract clause were discussed. However, other options are available to a contractor or subcontractor who is not getting paid for work performed. Even without a stop-work clause in your contract, you may have the right to stop work based on general legal principles. 1. Service ContractThe law allows a party to stop performance of a service contract (e.g., contract for a roofer to repair a leak) if non-payment is a “material” breach of the contract. Remember that a material breach also allows a party to terminate a contract. In other words, if one party materially breaches a contract, the other party may suspend work and wait for the breacher to make things right, or the other party may treat the contract as cancelled. As previously discussed, determining whether a breach is material is not always easy. The general test that the courts use to determine whether a breach is material has six factors: (1) Will the nonbreaching party essentially receive the benefit he was seeking? (2) Could the nonbreaching party be compensated by damages? (3) How much has the breacher performed under the contract? (4) What hardship does the breach cause the nonbreaching party? (5) Was the breach intentional? (6) Will the contract eventually be completed by the breacher? If the nonpaying party eventually pays, the other party should return to work because a late payment is probably not a material breach. If the party who stopped work due to nonpayment does not return to work after payment, he may now be in material breach of the contract. 2. Sale of Goods ContractIn the case of a contract for the sale of goods (e.g., contract for sale of roofing materials), North Carolina statutes allow a seller to stop or withhold delivery of goods on the basis of non-payment. In addition to non-delivery, an unpaid seller may recover compensatory damages and incidental damages. Compensatory damages are measured by the amount of difference between the original contract price and resale price. If goods are being sold in installments, the seller can withhold delivery of future installments only if the failure to pay for the installment is a “substantial impairment” of the contract. This concept is similar to the material breach requirement. In other words, if missing one payment is not a major part of the contract, you cannot withhold future deliveries. In all contracts for the sale of goods, if a seller develops reasonable grounds to believe the buyer will not pay for the goods, he may suspend delivery and demand assurances of the buyer’s intent and ability to make future payment. Stopping work on a service contract or withholding performance on a sale of goods can sometimes be a dangerous tactic because of possible liability that you may face. Consider and weigh the situation carefully before taking such action or contact an attorney. It is important to know that it is an option that is available in extreme circumstances. Perry Safran is a construction engineer/attorney in Raleigh, N.C., who specializes in construction law. If you have any questions, please contact Perry at Safran Law Offices: Phone: (919) 828-1396 or Fax: (919) 828-7993. Todd A. Jones assisted with this article. Article obtained from Roofing Contractor, a BNP Publication., May 2000
WHAT’S HAPPENING? 2000 SMRCA ANNUAL MEETING Of course you all know by now that the SMRCA Annual meeting was held at Casino Windsor on Thursday, April 27, 2000. The SMRCA Annual Meeting consisted of 105 attendees. The food and entertainment were fabulous, however whatever happened afterwards in the Casino will forever be a mystery. I know that I came home empty handed, how about everyone else? I’m pretty sure Casino Windsor has taken enough of our money! The SMRCA office is investigating new site locations for next year. If you have any ideas, please give us a call. We would love to hear from you.
I would like to make a special announcement. After serving as an RIPF Trustee since 1992, George Schena has decided to step down from the RIPF Trusteeship. George has spent many grueling hours sacrificing his time and efforts in volunteering to help improve the roofing industry. Schena Roofing & Sheet Metal Co., Inc., has been an SMRCA contractor for 42 years. Schena Roofing & Sheet Metal Co., Inc., is one of the founding member contractors of the SMRCA. On behalf of the RIPF Trustees and the SMRCA Board of Directors, we thank you for your dedication. Your efforts are appreciated by all. I would also like to take this time to welcome the newly appointed RIPF Trustee, Roger LaDuke, who was elected at the Annual Meeting on April 27, 2000. Roger too has been an RIPF/SMRCA member contractor for 42 years. LaDuke Roofing & Sheet Metal Company is also one of the founding member contractors of the SMRCA. Your RIPF Trustees and
RIPF: Chuck Rosa – President SMRCA: Ted Evans – President 2000 SMRCA ANNUAL GOLF OUTING The SMRCA Annual Golf Outing was held on Tuesday, May 16, 2000 at Bay Pointe and Links at Pinewood. Mother nature did not treat us very well, did she? The rain came down in buckets. I give you avid golfers a whole lot of credit for sticking with us under the circumstances. We averaged around 250 golfers for the day. Not bad! Here are some pictures taken at the golf outing. I hope you enjoy them.
ATLAS ROOFING ACQUISITION Atlas Roofing Corporation announces the acquisition of Falcon Foam, a division of Owens Corning, and producer of expanded polystyrene (EPS) foam insulation products. With this acquisition, Atlas acquired two plants, which are located in Los Angeles, California and Byron Center, Michigan. These plants produce EPS for packaging material, roof insulation (tapered and flat), sheathings and specialty insulation panels. EPS is ideal for both residential and commercial roofing and siding, and meets requirements for both new and retrofit projects. It is a lightweight, strong, resilient, non-corrosive and dimensionally-stable material. This is Atlas Roofing Corporation’s second EPS acquisition in recent months. “This acquisition is very timely for our continued growth in the EPS industry”, said Atlas Roofing president Ron Fredin, while announcing the agreement. “Falcon Foam not only supports our initial acquisition in EPS, but it also synergizes with our industry strength in the polyiso insulation markets.” EXPANSION PLANNED GenFlex Roofing Systems announced plans to build a new production line using the latest extrusion technology, with the unique capability of making wide sheet TPO and PVC roofing membranes, with production scheduled for late 2000. The board of directors of OMNOVA Solutions, Inc., the parent company of GenFlex Roofing Systems, approved the multi-million dollar investment in early November. In addition to supporting the rapid growth of GenFlex’s TPO and PVC roofing business, the equipment will provide opportunities for other businesses within OMNOVA, including the industrial film and coated fabric markets. “This represents a significant commitment to the single ply roofing industry”, says Jon Apgar, president, Building Products Division, OMNOVA Solutions. “The new manufacturing capacity will enable us to continue to significantly grow our sales in the fastest growing segment of the roofing industry. The unique capabilities of the extrusion equipment will allow us to manufacture the widest TPO and PVC sheets capable of meeting industry code requirements. In combination with our patented application equipment, we will be able to provide our customers with one of the broadest lines of single ply options, including TPO, PVC and EPDM systems.” DOW COMPLETES ACQUISITION The Dow Chemical Company announced it has completed its acquisition of Flexible Products Company, one of the largest polyurethane systems suppliers in North America and a leader in custom polyurethane foam formulations and dispensing technology. Dow received government clearance of the acquisition. Terms of the agreement were not disclosed. In a press release issued January 11, 2000, the company announced it had reached an agreement to acquire Flexible Products, citing the move as part of its growth goals in polyurethanes and its commitment to the global formulated products and systems business. According to Bob Wood, global vice president, Dow Polyurethanes, “This acquisition is a perfect complement to our existing formulated products and systems portfolio. It also will help Dow develop new, innovative application segments for polyurethanes, while we continue to provide the single best solution for every customer.” Flexible Products, headquartered in Marietta, Georgia, is one of the largest polyurethane systems suppliers in North America with annual sales of more than $140 million. The company serves customers in the refrigeration, construction, do-it-yourself, appliance, furniture, roofing, manufactured housing, door and panel, packaging, geotechnical and transportation industries. Flexible Products owns four manufacturing sites in North America: Marietta, Georgia; Joliet, Illinois; Austin, Texas; and Toronto, Canada. The previous articles were reprinted with permission from Dodson Publications, official publication of the Western States Roofing Contractors Associationm May/June 2000 edition. SIPLAST, INC., UPDATE Siplast, Inc., has completed construction of a 22,000 square foot corporate office building in Las Colinas, Texas. This facility is the new headquarters for Siplast’s operations in America. Siplast, Inc., has named Casey Paulson as District Manager for Arizona, New Mexico, Northwest Texas, the Texas panhandle and Clark County, Nevada. He will be responsible for new business development and general administration within his assigned district. NRCA’S 114th ANNUAL CONVENTION AND EXHIBIT The National Roofing Contractors Association (NRCA) announces that its 114th Annual Convention and Exhibit will be held at the Moscone Convention Center in San Francisco on February 14-17, 2001. The headquarter hotel will be the San Francisco Marriott. Registration materials will be available in September from NRCA’s Convention Department.
JAC ROOFING SCHOOL DONORS Platinum Benson’s Oakland Wholesale, Inc. Gold M.W. Morss Roofing , Inc.* Silver JR Enterprises* *Denotes Charter Member Donations for the JAC Training Center 2000 Program now total $22,350. We would like to thank all contributors, that have donated money, materials or who have volunteered their valuable time to this worthwhile project. The JAC Training Center 2000 Program is still accepting donations. The SMRCA would like to thank-you for your continued support. SMRCA GOLF OUTING SPECIAL THANKS! We would like to give a special thank you to Stacy Foley of Newton & Crane Inc., Terry Kiciak of Tri-R Products, Inc. and Beth Schmidt of Trumbull Division/Owens Corning for their tremendous effort and hard work in helping us make the SMRCA Golf Outing a success. We would also like to thank everyone who donated gifts this year. Without you, the outing would not be a success. 2000 SMRCA Golf Outing Prize Contributors ABC Supply Company, Inc. ANNOUNCEMENT Congratulations to
George and Marie Schena HAPPY BIRTHDAY CORNER!!!! Happy Belated Birthday to Happy Birthday to Teresa Berard of DRIS June 17th. Happy Belated Birthday to Marty Drury of Siplast Roof Systems April 26th.
INTO THE ELECTRONIC AGE Business owners are always looking for ways to increase revenue, lower expenses and do business more efficiently. According to the Michigan Association of Certified Public Accountants, adopting an electronic business structure can help you achieve these goals. E-business is not just about using e-mail or researching industries online. It is the complete re-engineering of business processes to eliminate manual intervention – functioning in a “clicks and mortar” environment, rather than a “bricks and mortar” one. An important component of e-business is e-commerce, which involves the buying and selling of goods online. According to Forrester Research Inc., e-commerce sales will reach 1.4 trillion in the year 2003. FIVE WAYS E-BUSINESSCAN HELP YOUR COMPANY: 1. Control your expenses. Linking, marketing, distribution and customer service electronically, may result in reduced operating expenses. Personnel, phone, postage and printing costs will also decrease as the Web takes on many of these functions. For many industries, this can be a substantial savings. By allowing customers to check orders, statements and information online, the reliance on customer service representatives will decrease. This may give you the ability to reallocate employee resources. 2. Market your business.The Internet also offers you a new way to sell your products. Establishing a Web site that features an online catalog, provides online pricing discounts and offers a virtual “store” for easy shopping can help boost your sales. In addition, an Internet presence enables you to provide customized information and become known as a leader in your industry, reinforcing your brand image. You can describe your company’s vision, conduct and post the results of online satisfaction surveys and emphasize your service commitment. All of these features make it more enticing for people to visit and shop on your site. 3. Provide real-time information to your customers.When you need information – and need it quickly – you can’t beat the speed of the Internet. You can get important information to your customers, suppliers, vendors and others within minutes. Real-time data such as promotions, liquidations, price changes and news can be easily accessed. Providing real-time information is also a good way to cut down on your employees’ workload. You can anticipate client issues and concerns and address them on your site, potentially reducing phone calls for your employees. 4. Improve customer service. An online service gives you the opportunity to provide customer service 24 hours a day, seven days a week. Customers will never feel out of touch if they have an ongoing means to learn about and comment on products and services. To meet the needs of your customers who want to reach a live person, post a phone number and address on your site. And don’t forget, someone must have responsibility for responding to electronic inquiries to ensure your company’s responsiveness. 5. Streamline operations. Technology can enhance communication within your organization and help streamline your business in even the most simplistic ways. For example, photocopies, memos and paper forms can bereplaced by electronic forms and files. Additionally, by using computer systems, staff can access and share information more quickly, leading to everyone in your business working more efficiently. Efficient internal operations also may improve customer and external relations. For example, if your staff is able to access data quickly, they can respond faster to customer inquiries and use technology to provide “on-the-spot” information to customers via phone or e-mail. Keep in mind, however, that depending on your objectives, you may need to make investments in new hardware and/or software to support this new infrastructure. The Michigan Association of Certified Public Accountants points out that having the right team of people who are experienced in working with businesses or implementing technology solutions is vital to making the transition from a “bricks and mortar” company to a “clicks and mortar” business. Remember, e-business, with proper development and implementation, can help you improve your company’s sales, marketing efforts, customer service and overall operations. Reprinted with permission from the Michigan Association of Certified Public Accountants. MiRCA 35thANNUAL CONVENTION The 2000 MiRCA Annual Convention is all planned and ready to go! The convention will be held at Boyne Highlands Resort in Harbor Springs, MI on Thursday, August 3rd through Saturday, August 5th. The MiRCA convention is always lots of fun. The MiRCA staff has planned programs for your spouses and your children that are always a big hit. So come and join us in the fun and bring the whole family. We guarantee you will have a great time!
QUESTION: I have just completed my estate plan. I have heard that the United States House of Representatives has voted to eliminate the estate tax. Is this election year politics or is there a realistic chance that my family can receive the family business without estate taxes? ANSWER: On June 9, 2000, the U.S. House of Representatives passed a Bill to phase out estate, gift and generation-skipping transfer taxes. The phase out would be complete after the year 2009. The vote was overwhelmingly in favor of the repeal (279 to 136). President Clinton indicated that he would veto this measure, but would work with Congress to target estate tax relief to “small businesses and family farm interests.” A repeal of the estate taxes would affect individuals with assets worth more than the exemption amount ($675,000 for the year 2000, gradually increasing to $1,000,000 under current law). This repeal would not come without costs. Under current law, there is a basis step-up to date of death value on all assets. In other words, if a decedent had 10 shares of GM stock with a basis of $25 and a fair market value of $100, upon death, the stock basis would be stepped-up to $100. Under the June 9 Bill, assets transferred at death in excess of certain values would carry over the decedent’s basis. The first $1,300,000 would receive a basis step-up. An additional $3,000,000 of value which would be transferred to surviving spouses would also receive a basis step-up. The executor would have the opportunity to choose the assets for such treatment. The proposed changes would offset some of the tax savings from the estate tax repeal by increasing income taxes on the sale of certain property received from a decedent but would add estate planning complexities, and would put a premium on accurate record keeping. It is unclear whether the Senate will follow the House in passing this legislation. It should be noted that during election years, Democrats and Republicans in the House of Representatives tend to pass taxpayer friendly legislation. The Senate tends to react more slowly to these type of tax saving measures. It should also be noted that an alternative Estate Tax Bill was also presented the same day that the House passed the Estate Tax Repeal Bill, which would reduce the top rate of estate tax from 55% to 44% and increase the $1,000,000 exemption to $1,150,000. If the Estate Tax Repeal Bill is vetoed, this alternate Bill could be the starting point for discussion of compromise legislation. Stay tuned for election year posturing all for the benefit of the “middle class.” ANNOUNCEMENTSHy-Tech Products, with offices in Cleveland, Oak Park and Indianapolis are pleased to announce the addition of Emil Hagopian to the company. He will be covering the state of Michigan for Hy-Tech. Emil brings 15 years of sales and roofing with him, and is looking forward to being of service to the area roofing contractors. Hy-Tech Products is the exclusive distributor of Garlock roofing equipment in the state, as well as offering a full line of commercial/industrial roofing equipment and supplies. Call 800-635-0384 or visit Hy-Tech at www.hy-techproducts.com. CONGRATULATIONSWe would like to send our congratulations to Mary Jo and Ken Dietrich on the adoption of their brand new baby boy, Matthew. SCHEDULE OF EVENTS 2000 June 22-24 Western States Roofing Contractors Association August 3-5 MiRCA’s 35th Annual Convention September 7-8 Midwest Roofing Contractors Association October 5 SMRCA’s Night at the Races
If you are interested in any of the following seminars, call the SMRCA office at (810) 759-2140 for more information. RIEI SEMINARS The RIEI provides educational seminars that include cities from coast to coast. RIEI addresses a wide variety of seminar topics which are of interest to roofing contractors, consultants, specifiers, plant engineers, and anyone else with a professional interest in roofing design, construction and maintenance. RIEI Schedule Certa Instructor July 26 Denver, CO Learn the safe and proper method of applying torch welded modified bitumen roofing. Each attendee becomes an MRCA (Midwest Roofing Contractors Association) Certified Instructor for the CERTA program. Demonstrations of proper equipment setup and application, a safety video and participation in classroom lectures will help students understand vapor and liquid propane technology, usage, handling and storage. Learn to implement programs and policies to assure a safe work environment for crews and property. Certification: After successful completion of the course, your photo and test score are sent to MRCA to be recorded. Modified Bitumen Roofing Systems July 27 Denver, CO Get an overview of available products and systems in the marketplace. Learn how to install and use these products not only in roofing systems, but as walkways, cap sheets, flashings and repair materials for all types of bituminous roofing systems. This course will be useful to anyone who has to choose roofing systems or repair and maintain bituminous roofing systems. This course is not for those new to roofing, as basic roofing concepts will not be covered. Roof Repair & Maintenance August 1-4 Denver, CO This course offers a practical approach for maintaining roofing systems. Learn to examine and identify samples of all the materials and components used in low slope roofing systems. Lectures precede each work shop demonstration on how the different types of roofing systems should be installed, identified, maintained and repaired. Students participate in hands-on repair exercises, learning to make emergency, temporary and permanent repairs on Built-Up Roofing, Modified Bitumen, Elastomeric (EPDM) and Thermoplastic Single Ply roofing systems. By conducting a visual inspection of an actual roof, students will learn to prioritize repairs based on deficiencies found, and incorporate them into a preventative maintenance program. OTHER SEMINARSHuman Resources and the Law July 18 & 19 Warren, MI A highly informative 2-day course designed for Human Resource Professionals who want the latest information on the laws that impact their departments so they can ensure company compliance and avoid ending up in court. Tuition: $529 per person COMPUTER COURSESMicrosoft Access 97 July 31-Aug. 1 Chicago, IL One or 2-day seminars designed to teach fundamentals through advanced levels, focusing on practical solutions to development problems. Seminars taught by the very best, most experienced developers in North America. Tuition: Varies PowerPoint Presentations August 2 Jackson, MI Make your ideas shine every time you speak using the attention grabbing, visually exciting power of today’s cutting-edge presentation techniques. Tuition: $179 to $308 CAMTECHLien Law/Payment Bonds July 11 8 a.m. to 1 p.m. All CAMTEC seminars are held at: |
