Failure to Draft Home Improvement Contract Properly Costs Contractor
By Thomas W. Hartmann
The Hartmann Law Firm LLC
TheHartmannLawFirm.com; [email protected]; 908 769 6888
The New Jersey case of Huston v. Lieber, App. Div. 09-2-6490, reminds contractors and homeowners of the importance of a properly drafted home improvement contract. In Huston, the Plaintiff, a licensed contractor, contracted with the homeowner to install a new deck and storm doors. The homeowner was not satisfied with the work and withheld payment. The contractor filed suit to recover the balance due.
But the homeowner did not just answer the complaint. Instead, the homeowner broadened the litigation and filed a counterclaim for attorney fees incurred in defending the action and contended that the contractor was precluded from enforcing the contract because he violated the New Jersey Consumer Fraud Act.
Specifically, the homeowner claimed that the contractor's written contract was defective in that the contractor's registration number was not in the contract, a copy of his certificate of commercial general liability insurance was not attached to the contract, and the contract failed to advise the homeowner that he had three days after receiving the contract to cancel it.
Initially the contractor won – but ultimately lost on appeal. The appellate court found that contractor's failure to adhere to the requirements of the Consumer Fraud Act constituted a violation of that Act and that a party who has violated the Consumer Fraud Act may not obtain damages even if the violation was innocent and committed in good faith. The appellate court also allowed the homeowner to continue with the original counterclaim to seek a determination of the costs and counsel fees incurred to defend against contractor.
This cost the contractor a tremendous amount of time, money, and emotion – largely for failure to properly prepare a master contract that complies with the New Jersey Consumer Fraud Act. The Hartmann Law Firm LLC can assist with this most important matter. Proper contract drafting is essential to the home improvement contracting business in New Jersey.