17.2 Contracts, Proposals, Specifications & Business Operations
Key Takeaways
- A proposal becomes a contract when it is accepted, so the scope written into the proposal is the scope the contractor is bound to perform.
- A scope of work must state what is included, what is excluded, and the standard against which performance will be judged.
- Change orders must be written and authorized before the additional work is performed, or the contractor bears the cost.
- Pricing built from measured production rates and true overhead recovery is defensible; pricing built from a competitor's number is not.
- Consulting and tree care work should be separated in practice and disclosed where both are offered, because recommending work one profits from is a conflict of interest.
The Business Relations area asks the arborist to write management plans and conduct business operations according to accepted industry best practices, standards, and specifications. In practice this is the paperwork that determines whether good arboriculture gets paid for and whether disputes get resolved.
The Proposal Is the Contract
In most jurisdictions a written proposal that is signed or otherwise accepted becomes a binding contract. Everything that matters must therefore be in it before it is sent.
Elements of a complete proposal
| Element | Why it matters |
|---|---|
| Parties and property | Identifies who is contracting and the exact address and location of the work |
| Tree identification | Species, size, and location, or tag numbers, or a marked plan — never "the big tree in back" |
| Scope of work | What will be done to each tree, in specification language |
| Standards referenced | The pruning, support, or safety standards adopted by reference, so performance is objectively assessable |
| Exclusions | What is expressly not included — stump grinding, debris haul, turf repair, fence removal, permit fees |
| Price and payment terms | Amount, deposit, progress payments, final payment trigger, late terms |
| Schedule | Start window, duration, weather and access contingencies |
| Access and site conditions | What the client must provide: access, gate keys, vehicle removal, animal containment, utility marking |
| Permits and approvals | Who obtains them and who pays |
| Insurance | Evidence of general liability, automobile, and workers' compensation coverage as applicable |
| Limitation of liability and disclaimers | Clear, conspicuous, and lawful in the jurisdiction |
| Change order procedure | The mechanism for authorizing additional work |
| Signature and date | Acceptance |
Write the scope in specification language. "Prune the oak" is unenforceable. "Prune the oak (Tree 4, marked with blue tag): objective — provide 4 m clearance over the driveway; system — natural; parts — living and dead branches; amount — not more than 10 percent of live foliage; location in crown — south and west aspects over the driveway only; cut types — removal and reduction to laterals at least one third the diameter of the parent; size range — 25 to 100 mm; debris — chipped and removed; time frame — dormant season" is enforceable by either party.
Exclusions do more work than inclusions
The most common source of residential tree care disputes is an expectation gap over things nobody wrote down: whether the stump is ground, how deep, whether the grindings are removed, whether the lawn is repaired, whether logs are left cut to length, whether the neighbour's side is cleaned up, and whether ruts are restored. Every one of these belongs in the proposal as an inclusion or an exclusion.
Risk Allocation Terms
| Term | Function |
|---|---|
| Indemnity and hold harmless | Allocates responsibility for third-party claims; must be lawful and mutual enough to be enforceable |
| Limitation of liability | Caps exposure, commonly at the contract value for consulting work |
| Force majeure | Excuses performance for defined events outside either party's control |
| Access and underground damage | Allocates responsibility where the client fails to mark private utilities such as irrigation, invisible fencing, and low-voltage lighting |
| Property damage on access | Sets expectations about lawn ruts, driveway loading, and restoration standard |
| Termination | Defines how either party exits and what is owed |
| Dispute resolution | Names mediation or arbitration, the governing law, and the venue |
| Subcontracting | States whether subcontractors may be used and who is responsible for them |
No tree can be warranted. A term that promises a tree will survive, or that it will not fail, is unwise and often unenforceable. What can be warranted is workmanship: that the work was performed to the referenced standard.
Estimating and Pricing
Defensible pricing comes from the company's own data, not from a competitor's quote.
- Measure production rates. Track actual crew hours per job type by tree size, access difficulty, and method. Over time this yields realistic hour estimates.
- Build a fully loaded hourly cost for each crew configuration: wages plus payroll taxes, insurance including workers' compensation, benefits, vehicle and equipment ownership and operating cost, fuel, saw and rigging consumables, and non-productive time including travel, briefings, maintenance, and training.
- Recover overhead. Administration, sales, office, insurance, licences, professional fees, and marketing are real costs recovered across all billable hours.
- Add profit deliberately, as a stated margin rather than as whatever is left.
- Adjust for job-specific risk: proximity to structures, conductors, access difficulty, disposal distance, and the presence of a target that raises the consequence of an error.
Consulting work is usually priced by time, at an hourly or daily rate, with expenses, because the scope of an investigation cannot be fully known in advance. Fixed-fee consulting invites scope creep unless the scope is exceptionally tight. Never price consulting work contingent on the outcome — a fee that depends on the appraised value or on the litigation result destroys the objectivity the opinion depends on.
Change Orders
The rule is simple and constantly violated: additional work is authorized in writing before it is performed.
A change order states what changed, why, the price adjustment, the schedule adjustment, and the client's authorization. Verbal approvals on a busy site are the origin of most residential collection disputes. Where a genuine emergency requires immediate action, document it contemporaneously — a photograph, a timestamped note, a text message confirming the instruction — and issue the written change order the same day.
Client Communication
| Practice | Effect |
|---|---|
| Explain the recommendation in the client's terms before quoting it | Converts a price into a decision |
| Present options with their consequences, including doing nothing | Establishes that the client made an informed choice |
| Confirm verbal conversations in writing | Creates a record and prevents drift |
| Notify before starting, and walk the site at completion | Catches expectation gaps while they are still cheap |
| Respond to complaints promptly and in writing | Most disputes escalate from silence, not from the original problem |
Records and Documentation
The record set that protects a tree care business: signed proposals and change orders; job briefing records; certificates of insurance; permits; before-and-after photographs; pesticide application records where applicable; equipment inspection and maintenance records; training records; and completed work orders. Retention periods should be matched to the applicable limitation period for claims in the jurisdiction.
Conflict of Interest in Combined Practice
Many arborists both consult and perform tree work. That combination is not prohibited, but it carries a standing conflict: recommending work that you will be paid to perform.
The professional controls are:
- Disclose the interest in writing whenever recommending work you or your company may perform.
- Separate the roles explicitly on engagements where independence matters — appraisal, risk assessment for litigation, expert testimony, and construction project arborist roles.
- Never accept a fee contingent on the recommendation or on the outcome.
- Decline the second role where the first requires independence and the client cannot be adequately informed.
The relevant professional standard for credential holders is the code of ethics, and the practical test is whether an informed third party would consider the arrangement capable of influencing the opinion.
Subcontracting and Working With Other Trades
Where a subcontractor is used, verify insurance and licensing directly with the carrier or issuer rather than accepting a copy, confirm that the subcontractor's crews are qualified for the tasks assigned, define who supervises the work and who holds stop-work authority, and confirm how the client's contract flows down. On construction projects, the arborist frequently sits below a general contractor whose schedule pressure conflicts with tree protection, which is why the authority to stop work and the reporting line must be established in the contract documents rather than negotiated in the field.
A residential client accepts a written proposal to "remove the large maple at the rear of the property." After removal, the client is angry that the stump remains and that the lawn is rutted. The proposal said nothing about either. Who bears the cost, and what was the drafting failure?
Midway through a job the crew leader identifies two additional dead limbs and the homeowner says "go ahead and take those too." The crew does the work and adds it to the invoice, which the homeowner then disputes. What should have happened?
A consulting arborist is asked to appraise a damaged tree and proposes a fee equal to 10 percent of the appraised value. Why is this improper?
Which statement about warranties in a tree care contract is correct?