Attorney’s Fees Clauses in Home Improvement Contracts — The home improvement industry is one in which consumer disappointment is more frequent than it should be.
In order to make sure that the contractor and customer are on the same page, the terms of the written contract are crucial. In order to ensure the protection of both the contractor and the customer, every aspect of the project, every promise, and all agreements should be in writing in the contract.
Understanding Attorney’s Fees Clauses in Home Improvement Contracts
Each clause and each piece of information in a home improvement contract is important to protect both you and the contractor doing the work. From the payment schedule to an attorney’s fee clause in contracts, you want to make sure you have read every line and understand what you are getting into. So, to that end, consider a few of the more common home improvement contract terms and clauses, some actually required by the law in most states, and the importance of an attorney’s fee clause in contracts is.
- An attorney’s fee clause protects you if there is a dispute over the contract.
- Without an attorney’s fee contract, you could win a lawsuit and still lose money.
The Basics of Your Contract
One of the basic requirements of any home improvement contract is all of the contractor’s information. You should have the contractor’s name, phone number, address, and license number. Make sure there is a license number since most states require it. Additionally, no contractor license can be a sign of bad things from a scam artist to simply a bad and inexperienced contractor.
Secondly, you should always make sure that any verbal agreements made are added to the contract. When planning a home improvement project and interviewing contractors, there are many verbal commitments made. Getting those in writing will ensure that they actually get done and that there are no disagreements over what was promised at the end. If there is a disagreement, then you have a written contract that can aid you in court. Such issues, when they arise, are also why it is important to have an attorney’s fee clause in contracts.
Next, make sure you have something in the contract that outlines how change orders will be done. A change order is written permission for the contractor to make changes to the work you have agreed on in the original contract. They are not uncommon because of the nature of home improvement, but they do change the cost of the project in some cases. The clause needs to outline when the change order is to be paid for and how the authorization will be conducted.
The laws of many states require that the contact contain a clause or that you be given a separate statement that gives you, the customer, the right to cancel the contract within three business days of its signing if it is signed anywhere that is not the contractor’s permanent business location. You should get two copies of a form for cancellation along with the contract. You right to cancel must be explicitly explained in the documentation you receive.
Careful With Pricing
A good home improvement contract contains the pricing for the project. There are a number of ways this can be calculated or written. Because of that, you should make sure that you completely understand what is being offered by the contractor and what is being written into the contract. Once you sign the paper, you are agreeing to the terms, so it is worth a little extra time to make sure you know what you are paying for.
One type of pricing a contractor may offer you is square foot pricing. This is where you are charged by the square foot of home that is being worked on. The problem with this is that it is sometime difficult to get an accurate estimate. Additionally, you may find it hard to compare prices from other contractors. Also, the bid, then, will not contain a good list of materials and products. You will be unable to tell who is using the better materials but charging the best rate under that consideration.
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A fixed price bid is the most common and considered the standard type of bidding for home improvement contractors. A fixed price means just that: the price is fixed and will cover the time and materials. The nice thing about a fixed price contract is that it means your contractor has thoroughly poured over your project, the materials that will be needed, and the time involved. It is often, then, the most accurate type of contract.
Finally, you may hear about time and materials contracts. In this pricing system, the contractor charges you as the job progresses. You get charged for time, material, and profit. If you agree to go this route with your contract then make sure your contractor puts in a maximum price so that you cannot end up being charged indefinitely.
When Things Go Wrong
The most common ways contract disputes get resolved is through a lawsuit. The possibility of a lawsuit is exactly why you should include an attorney’s fee clause in a contract. This protects you from the cost of your lawyer should you be involved in a dispute with the contractor and win. Reciprocally, your contractor is protected in a lawsuit if he or she wins.
An attorney’s fee clause in the contract is a provision that says the loser in a lawsuit is responsible for paying the legal fees of the winner. So, if you believe your contractor has not completed the job as outlined in the contract and you end up in court, the clause says that whoever wins the case is not responsible for their own legal costs. Instead, the loser would pay for both parties’ attorney fees. This protects you if you have to sue to have work done and it protects the contractor should he or she have to sue for nonpayment of agreed upon fees.
As you can see, an attorney’s fee clause in a contract is important as protection. Without it, you may sue your contractor for work to be completely and end up paying for your legal fees to the tune of more than the work would have cost separately anyway. For that reason alone it is worth fighting to get it in there.
As you can see, a lot goes into a home improvement contract. When the time comes for one, it may be worth the investment to have an attorney look over what you are doing to make sure all clauses and provisions included make sense for both parties
Upon the conclusion of the project, make sure all agreements have been met by your contractor. Get copies of letters from the subcontractors stating they have been paid. Finally, make sure you have warranty information for any installed products, appliances, or fixtures that were added. Then all that is left is to pay your contractor in accordance with what you have in writing. With that, you can see that the agreements and an attorney’s fees clause in a contract are worth the time to put it together right.