We got an email from an old client that we hadn't heard from in years.  As I recall, they were not willing to pay our fees and they found someone cheaper. They wanted to add us to the vendor list again, and they attached a "New Vendor Package" for us to complete.  I read it and politely declined because their "Vendor Agreement" was inconsistent with our policies. 

The first inconsistent provision addressed billing terms:

[Company] will auto-pay Vendor and provide an itemized monthly statement with payment.  Payment will be within 60 days of end of each billing month. (For example, end of billing month of August is September 1st.  Payment will be made by November 1st.)  If Vendor has signed the 3% discount agreement, then payment will be mailed within 15 days after the billing month's end.  Any discrepancies that Vendor finds will be addressed with [Company]'s accounting department upon receipt of payment.  If discrepancies are not addressed within 30 days of receipt of payment, the discrepancies are null and void.

Our terms are Net30... always have been and always will be.  We are not willing to give a 3% discount for a client to pay on-time.  What they are really saying is "we will pay you late every month unless you agree to give us a 3% discount."  I don't think so... but thanks for asking.

I am also appalled that they put the onus on the abstractors to point out mistakes in their auto-pay system.  If they make a mistake and the abstractor doesn't contact them within 30 days they aren't going to correct them. They want to take 60 days to pay, but they aren't willing to correct their mistakes if not presented within 30 days?  Again, I don't think so... but thanks for asking.

The second inconsistent provision, regarding using their website:

Vendor agrees to utilize [company]'s vendor website on a regular basis and keep their account current.  This includes reprinting of orders not received via email or fax from [company] and posting delay comments when applicable.  Vendor takes full accountability for any missing orders or late work according to this agreement due to Vendor will have access to all their orders regardless if phone lines or email is functional.

We work with 50+ companies each month.  We are not going to constantly monitor a client's "vendor website" just to see if they have anything for us that might not have been sent via email or fax.  Again, I don't think so... but thanks for asking.

The third inconsistent provision, regarding 50% fee reduction:

Current owners or any form of title searches requested will be received by [Company] within 1 business day from receipt of order.  [Company] will be notified immediately (verbally or posted on [Company]'s vendor website) of any problem that will cause a delay in the receipt of the results.  If an order extends beyond 1 business day for any other reason other than force major (i.e. natural disaster, fire, etc.) or document certification, and Vendor has not provided sufficient reason for delay of result, 50% of the search fees will be deducted from that request's invoice.  If Vendor has not provided search within 2 business days without sufficient reason, the request will be reassigned and Vendor will not be paid for the search at all.

Whenever I see a provision like this in a vendor agreement, I wonder how awful their current abstractors are that they felt the need to include a 50% penalty for late orders.  Normally, we return our current owners the following business day.  But, that isn't always possible.  I wonder what they consider "sufficient reason for delay."  I doubt they would have the same interpretation that I would have.  Sometimes the searches are just very difficult and require more time.  Sometimes, we just get busy for a couple of days and we get behind.  If we staffed enough abstractors to be able to ensure that we could always return every search the next business day, I would have a room full of abstractors with nothing to do most of the time.  That is obviously not a workable solution.  Occasionally, we get "slammed" by a client with 20 searches all at once.  Obviously, that is going to put us a little behind.  Still, we do our best to get everything out in a timely manner and it is rarely a problem for our clients. What happens if one my abstractors gets sick?... we once had one admitted to the hospital for surgery that was quite unexpected.  We got a little behind, but our clients were very understanding.

If later orders are such an issue that client's feel the need to assess a 50% penalty, they need to find new abstractors.  If we had a client upset because we had an occasional search returned late, I would understand if they wanted try to find someone who could do better.  But, I am not going to allow a 50% reduction of my fee.  I don't think so... but thanks for asking.

And, the fourth inconsistent provision, dealing with missed documents:

Vendor agrees that they will refund all fees for any documents they are unable to locate that are found at a later date through another source.  [Company] will provide recording information and/or copies of the documents to Vendor at the time of dispute.  Only if there is physical proof (county printout or clerk's letter) there was was a county error will Vendor be paid for the search.

Hmmm... if they have "another source" that is so much better than their abstractors, why don't they just use them?  As much as I hate to say it, we all make mistakes.  As I was once told, "any abstractor that tells you they have never missed anything is either lying... or they just started yesterday."  Of course, we do our best to minimize mistakes and they don't happen often, thankfully.  We are always more than willing to investigate and make any corrections that may be necessary at no additional charge, but I am not likely going to agree to eat the entire fee (unless it was clearly our fault and there was no other explanation).  I am certainly not going to spend a lot of time trying to "prove" that it was a county error - that might take longer than we spent on the search!  And, often times, after a county correction, there is no trail publicly available to prove that it was ever done.  So, I don't think so... but thanks for asking.

These Vendor Agreements are extremely one-sided.  I have to wonder who in their right mind ever signs these things.  This is the second one in the last month that I have declined to sign.  In fact, I haven't seen one yet that I am comfortable with. 

We have fairly simple policies... we send the potential client our fee schedule, county coverage area, W-9, and our E&O declarations page.  When we do the work, we expect to be paid in full, within 30 days from our end of month invoice.  That is it... no exceptions!  If the client wants us to do the search, those are our terms.  If they can't live with those terms, we don't do anymore work for them. 

To all the others, I don't think so... but thanks for asking.

Robert A. Franco
SOURCE OF TITLE