Navigating Subscription Models in the Building Industry

As the home building industry continues to evolve, so too does the approach to obtaining the materials needed for the job. One interesting facet of this evolution has been the incorporation of a subscription model into the procurement of building materials for new homes. Overall, subscriptions to building materials seems to be on the rise and many building professionals are rapidly becoming accustomed to the ease that can accompany being able to obtain consumables on an as-needed basis. Sometimes the lure of a subscription to obtaining goods can be too much, and then what? While building materials may now be delivered monthly, bi-monthly, or quarterly, sometimes there is regretting the decision on subscribe to automated delivery.

With a plethora of new subscriptions popping up to deliver building materials and other goods for builders and general contractors to use, these companies are often faced with a question- how is this subscription structured and how do we change it if we feel it no longer works out for us? Many of the subscription services include terms and conditions that when read, may create an impression that the subscription can easily be terminated with no penalty. That impression, however, can be deceiving and when it comes time to cancel, it is imperative that the company acting as general contractor or builder understand the legal nature of canceling a subscription.

As with many contracts, many of these subscription contracts will contain a termination provision that outlines the rights and obligations of the parties upon cancellation. Some of the worse experiences with a subscription termination have been where a general contractor has tried to cancel the agreement via a simple email. The provider of the goods interprets the email as a formal request to stop the automated deliveries and to send a final invoice for the last order. The next thing the general contractor or builder knows, they receive an additional, perhaps even larger invoice for materials that were ordered but pending shipment at the time of the cancellation.

The company, after realizing what has happened, emails the subscription provider to request that the last order of goods be cancelled. However, that email goes ignored. Then another invoice comes in for an additional shipment of goods, again adding up. Understandably, this can lead to frustration and downright anger by the contracting company who feels as if they were tricked into another order. The quick takeaway is that the terms and conditions associated with the subscription should be reviewed and understood, both before initiating the subscription and before trying to cancel the order. A more proactive approach would be to ask a supplier whether they offer a trial period or other similar arrangements if you are not sure whether the subscription will work for you. This will allow for some flexibility in the contractual arrangement and understanding of the underlying terms and conditions.