The economy is good. Home improvement
contractors are busy, and homeowners are finally undertaking those renovation
projects that they postponed when times were bad.
You’ve done your research and found a great
contractor. Everyone is excited to start
the job. Perhaps you glance at the contract,
and it seems fine. Why hire a lawyer to
review your contract?
It always astounds me when homeowners undertake
six-figure projects without having a lawyer review the contract. My rule of thumb is simple. Always have an attorney look over your
agreement unless it’s for an amount of money that you are willing to lose.
Honestly, most contractors (and I represent many,
many of them) get their contracts from the internet. They include standard clauses that are
required by state law. They may have had
an attorney review the contract, but that attorney is working for them, and is not representing your best
A contract is a “meeting of the minds.” It is a way to establish expectations while
the relationship is good. Hopefully, the
parties negotiate the contract and then it collects dust on a shelf.
Here are some of the clauses that I put into
contracts that are important, and in many cases, required by Massachusetts law.
1. Scope of work-What
exactly is the scope of work? Which
materials will be used, including brands and models? What is not included in the scope of the
2. Begin and end dates-When
is the work going to start? Are permits required? Does the homeowner have a
strict deadline for completion of the job? Is the work weather-sensitive?
Should there be a penalty for delay?
3. Payment schedule-Is it a
fixed price or time and materials contract? Does payment occur at the beginning
or end of milestones? Is it contingent upon a bank loan? Is payment required
even if there is an issue with the quality of the work? Can the contractor stop
work for nonpayment? Jobs are more likely to stay on track if the payments do
not get ahead of the work and vice-versa.
4. Termination-Can either
party terminate the contract? What issues form the basis for termination? How
is a termination supposed to take place?
5. Insurance-What types of
insurance are required? Has the contractor provided the homeowner with evidence
6. Authority to make decisions-Who
has authority to make decisions on behalf of the homeowners? The Contractor?
7. Warranties-What types of
warranties will be provided?
8. Dispute resolution-Will
the parties attempt to mediate disputes before going to arbitration or filing a
9. Permits-Which permits are
required? In Massachusetts, the
contractor must obtain the permits, or the homeowner will be denied access to
the State Guaranty Fund, which is a victim’s assistance fund run by the state
to compensate homeowners who have suffered damages as a result of defective
work by contractors.
10. Finally, Rule #1!-All
change orders must be in writing, reflect any change in the contract price and
the date of substantial completion.
are just some examples of the issues that should be considered when drafting a
home improvement contract. By making the
effort to have a clear understanding of how the project is going to work, both
contractors and homeowners can prevent disputes. The contract can also provide a guide for how
to handle disputes if they occur.
one considers the amount of money and effort that goes into a home renovation,
the incremental cost of having an attorney review the contract is well worth
it. In addition, that lawyer can serve
as a resource if problems occur during the project.