Simply put, this means that you are entering an agreement for a time only. If it looks too good to be true, it usually is!
Most competitors want you to sign a 3+ year contract. They will, in most cases, not disclose this unless you read the "fine print" (usually after you have signed and it's too late!).
There is also a "Rollover" clause, such as "failure to notify prior to end of the term", which means that your original contract may continue on for up to another 3 years. This makes your contract a potential 6+ year deal - How fair is that?
In most cases, there is also an exclusivity clause which states that they are the only waste hauler allowed on your property - absolutely ridiculous!
There is also a "first right to refusal", which simply put, means that if you ever wish to leave them, they have the right to match the competitor's offer for pricing or service, potentially making our hard work as a competitor obsolete and also making your contract renew for another 3 years.
There is also a clause which states that you can leave the contract on 30 day's notice, if you pay up to 6 months current billing as a penalty. All this for the "privilege" of walking away from their contract.
They have also based your pricing on the industry average or 50 kgs per yard. This can potentially increase your pickup rates, pickup days, or container sizing at any time during their contract period. This usually takes place a few months after you sign their contract, to which you have no recourse!
In most cases during their contractual period, they will however, notify you that they will restrict their price increases to the cost-of-living index for each year of service. This is something that is misleading since it is an allowable item in all contract anyway. But they will, however, for reasons stated in the "fine print" increase the price of services rendered for reasons "other than". This basically gives carte blanche to jack the price up at will with no control on your part. This is how in most cases the hauler makes up for a "quoted cheapest price" in the beginning. Over time they will make up for this and increase your pricing. So, over the 3 year period you will have paid more than the other quoted pricing from the other competitors at the time of tender.
So, after reading the above, what is the benefit to signing a contract? Remember, a contract is written by a lawyer to protect his client, which isn't you!
Warning note: A common practice during your contractual period, that if you should ever change your service frequency, or container sizing, they will come in stating that you need to sign paperwork which relects these changes, when in reality unbenounced to you, you have signed a new 3 year contract -Surprise!
