The Importance of a Good Contract
The contract may be the most important part of any project. Maybe that’s why it’s completed first.
The written contract allows for an understanding so both parties will be clear about what to expect. But of more importance to the contractor, it provides the legal mechanism to get paid for the work agreed-upon.
As with any contract, each “i” should be dotted and each “t” crossed. All bases need to be covered in the event of a dispute.
States have gone out of their way to protect the consumer who enters a contract. This is especially true when it involves real property since the contractor can lien such property to collect a debt.
Because of this power, the contractor is subjected to rigorous rules, regulations, laws and timelines. The law is not going to make it easy for a contractor to encumber someone’s home or other real property. That’s why the contractor better comply with the letter of the law when it comes to contracts.
And when we say “the letter of the law”, we mean it! Courts have ruled against contractors time after time because a contract was not well-written or was technically flawed.
A clause with one word not stipulated as the law requires, or a missing clause, or a clause not written in the right size or type style, has resulted in the contractor losing, no matter the other merits of the contractor’s work or case.
Another mistake that contractors make is to fail to give The Three-Day Notice of Cancellation. Just because the contract mentions it, is not enough. Federal law (FTC) requires a separate form be given. The separate form fully explains the right to cancel and is to be used to notify the contractor that the consumer is exercising that right.
While commercial contracts and subcontracts also have certain language required, they are not nearly as regulated as a contract with a consumer. The regulators do not much care what people do to each other business-to-business but they are strict when it comes to dealing with the consumer.
More than 40 years ago, some of California’s top contractors got together with the best construction lawyers and fashioned and developed construction forms and agreements that would become the standard for the industry. They determined that these forms and agreements must be easy to use, comply with all laws and regulations, and include clauses and provisions to cover virtually all aspects of a construction project. Those same forms and agreements are in use today and are constantly being updated to comply with the latest changes in law, various court decisions and professional standards.
You can purchase any of our forms or agreements at the Catalog
page.
