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Contracts that Kill

Posted by admin on 8 April 2014 | 0 Comments

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We have handled hundreds of residential remodeling disputes. When people come to us, the first thing we do is look at the contract. Massachusetts requires the use of a very specific contract (http://www.mass.gov/ocabr/docs/sampcont.pdf). The contract must include 14 mandatory provisions (http://www.mass.gov/ocabr/consumer-rights-and-resources/home-improvement-contract/required-contract-terms.html). Contractor that do not use this form are potentially liable for Homeowners’ costs and attorneys’ fees as well as, under certain circumstances, multiple damages. This holds true even if the Homeowner supplied the contract! Also, even much more comprehensive contracts like those from the AIA family might not comply. In short, Contractors not using State-mandated contracts are putting themselves at enormous risk. Conversely, Contractors who use the mandated contract coupled with other documents such as “Limited Warranties” often tip the playing field in their favor.
Here are some key tips to consider: first, use the State-mandated contract. There is no excuse for not using this form. Second, incorporate into that contract other documents that shed light on the scope of the project. Specifically, the Contract has a space that reads “The Contractor agrees to do the following work for the Homeowner”. This space should identify all plans and specifications. Mason&Mason Ad
Third, identify what is defect and what is not. Perhaps more importantly, identify what the Homeowners’ maintenance responsibilities are. We often draft a “Limited Warranty” that addresses these points. Indeed, the State-mandated contract has a space for insertion of this information (“Express Warranty - Is an express warranty being provided by the contractor? • No • Yes (all terms of the warranty must be attached to the contract)”). For example, Homeowners should be apprised of the fact that nail heads popping out and shrinkage cracks are not signs of defective construction and will be covered by the Limited Warranty for some finite period of time.
It is important to alert Homeowners about their maintenance obligations. For example, we see lots of dispute arising from solid exterior doors cracking and water infiltration from gutters and grading. Clearly, these are Homeowner maintenance items. We include these maintenance items (and many others) in the Limited Warranty so Contractors will not be wrongfully blamed for the same. Contractors understand homes are dynamic and need maintenance, but Homeowners frequently do not. Providing Homeowners with that knowledge in the form of a Limited Warranty might prevent problems from arising or, alternatively, place the responsibility where it belongs.

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Drew is a Partner and Co-Chair of Partridge Snow & Hahn, LLP’s (www.psh.com) Construction Group. He earned the AV® Preeminent Rating from Martindale Hubbell which represents the highest possible rating on both legal ability and ethics based upon the confidential opinion of peers and judges.

 

 

 

 

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