A construction contract is essential to any transaction since it defines the rights, responsibilities and remedies of each party to the agreement. The contract should include the scope of work, the date or time frame expected for completion of the job or each item, the price of labor and materials and the payment schedules.

The contract should also state what warranties are being offered, what permits are required and whether a mechanic’s lien will be filed or recorded to secure payment. Many construction contracts also include penalties or liquidated damages for late performance, and the method to be used to resolve disputes such as Arbitration or Mediation. Lastly, proof of insurance and effective dates of coverage, as well as coverage amounts, should be requested if not volunteered by the Contractor.

Consumer Protection Statutes

Many states, including New Jersey and Pennsylvania, have passed laws governing construction contracts and the language required to be included. These laws generally govern Contractors who are involved with the construction, replacement, installation or improvement of driveways, swimming pools, solar energy systems, pool houses, garages, roofs, siding, insulation, security systems, flooring, patios, fences, gazebos, sheds, cabanas, painting, doors, windows, waterproofing, installation of central heating or air conditioning, and installation of storm windows or awnings.

Pennsylvania’s Home Improvement Consumer Protection Act requires that every contract:

• Contain the approximate starting date and completion date of the work;
• Include a description of the work to be performed, the materials to be used and a set of specifications;
• Include the names, addresses and telephone numbers of all subcontractors on the project;
• State that the contractor agrees to maintain insurance and identifies the current amount of insurance maintained at the time of signing the contract;
• include a notice of the Right of Rescission providing that a consumer can rescind the contract within three business days of signing the contract.

New Jersey requires every Home Improvement Contract in excess of $500.00 contain the following:

• The legal name, business address, and registration number of the Contractor;
• Proof of commercial general liability insurance and the telephone number of the insurance company issuing the certificate; and
• The total price or other consideration to be paid by the owner, including
• the finance charges.

Conclusion

Construction projects can give rise to massive legal issues and problems. In many cases, knowing what may come up can protect against those issues and problems getting out of hand, and causing undue trouble or expense for everyone involved. Everyone involved in a construction should have legal counsel to help protect him or her from what may arise. An experienced construction law attorney can give you the counsel you need to protect your interests.