South Bend / Mishawaka, IN – When parties to a contract fail to memorialize the terms of their agreement in writing and subsequently have a dispute or falling out, the only usual winner is each party’s respective attorney. Countless hours can be spent litigating a case which essentially boils down to a classic dispute of “he said/she said”. Many of these hours could be avoided with a simple written contract clearly outlining the terms of the parties’ agreement. In some industries and situations, a written contract is not only a prudent business practice, but it is also the law.
Such is the case for all home improvement contracts with a contract price exceeding $150. In response to alleged abuses by certain unscrupulous home improvement contractors, the Indiana legislature adopted the Home Improvement Contracts Act in 1987. Is has undergone some modifications since its enactment but, despite being on the books for almost 30 years, home improvement contractors are often-times unaware of its existence and requirements.
As the title of the law suggests, the Home Improvement Contracts Act only applies to contracts for the improvement of residential property entered into between a home improvement contractor and a consumer (defined as any individual who owns, leases, or rents the residential property at issue). Under the Home Improvement Contractors Act, the contract must contain:
(1) The name of the consumer and the address of the residential property that is the subject of the home improvement;
(2) The name and address of the home improvement contractor and each of the telephone numbers and names of any agent to whom consumer problems and inquiries can be directed;
(3) The date the home improvement contract was submitted to the consumer and any time limitation on the consumer’s acceptance of the home improvement contract;
(4) A reasonably detailed description of the proposed home improvements or an authorized statement concerning future furnishing of this description;
(5) The approximate starting and completion dates of the home improvements along with a statement of any contingencies that would materially change the approximate completion date.
(6) The home improvement contract price.
(7) Signature lines for the home improvement supplier or the supplier’s agent and for each consumer who is to be a party to the home improvement contract with a legible printed or a typed version of that person’s name placed directly after or below the signature.
The language of the contract must also be carefully prepared in a form that can be reasonably read and understood.
As if these requirements were not difficult enough, the law also imposes additional requirements on a home improvement contract paid, in whole or in part, through the proceeds of an insurance policy (think fire damage or hail damage). By way of example, the Home Improvement Contracts Act also requires that certain rights be enumerated regarding cancelling a home improvement contract where exterior work is to be performed and insurance money is at issue.
And, even when the parties clearly and appropriately define their rights in a written agreement, the home improvement contractor must be cognizant of the Home Improvement Contracts Act’s requirement that contractors place any changes or modifications in writing and obtain the signature of the consumer.
In addition to the Home Improvement Contracts Act, there are several other statutes and concepts a home improvement contractor should address in its standard contract or work authorization.
For more information or if you would like your contracts reviewed for thoroughness and legal compliance, please contact Trevor Gasper, 574-243-4100.
The content of this article is for informational purposes only, and does not contain, nor should be construed as containing, legal advice.
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