may sound like fairy-tales to kids and grandkids that some of
us have grown up in houses where you never locked the door, where
you settled a deal with a handshake... and got what was promised to
that's just not the way it is anymore. You almost never know
the merchant or his parents and you can seldom get anyone to give
you a referral. Therefore, deals that are cooked up and sealed
with a handshake may be difficult to challenge.
do have to realize though, that contractors are in the same
boat. Everyone who has been in business for long has run into
the nightmare client for whom they have completed all the work that
was specified, only to find out that the client expects more... and
more. Then they want to wait to pay or suddenly cannot afford
it, or just refuse to pay. Occasionally, clients will even try
to sell a house and run from debts or refuse to pay because of some ridiculous
objection. Hence... the contract.
are critical for just about any business deal. There are in
fact three kinds of contracts, a verbal contract, an implied
contract, and a written contract.
For the most part and to a limited extent,
verbal contracts are
just as valid as a written contract. Some states may however,
impose limitations on the verbal contract if the value of it exceeds
a certain dollar value or the term of the contract is over a certain
period of time. In other words, holding someone to an
agreement to provide a service ten years down the road or a multi-million
dollar verbal agreement would probably be very tough in most states.
problem with verbal contracts are that they are often very hard to
prove, especially if they are very complicated or have no
independent witnesses. The parties themselves may not even
recall the exact details to which they agreed. Therefore, if
neither side can can show a written contract, judges are often
forced to apply "fairness" or other governing state
laws. The problem with "fairness" is that at least
one person won't consider it "fair.
general, try to avoid verbal contracts. Anyone that wants you
to agree to something but won't put it into writing, just isn't
worth the time. And they are very likely out to scam you.
Every item or service that is sold has an
associated with it. Implied contracts (sometimes referred to
as implied warrantees) are not written contracts but they are
developed by state law. In legal circles, this is referred to
as "fitness for a particular use" or a
Example - it is reasonable
to assume that when you buy a computer, it will turn on and be able
to perform certain tasks. If it doesn't meet the typical
and/or reasonable expectations of a normal person, you have legal
rights the merchant has a legal duty to rectify the situation or
refund your money.
is only one exception to the implied contract rule. That
exception is that if an item is sold "As Is", there are no
warranties of any kind. The "As Is" statement is
meant to inform the consumer that there are or may be defects and
that any and all warranties are void.
you were to purchase a computer marked "As Is" and it did
not work properly, you probably have very few legal rights to a
Whenever possible, try to obtain a written
you can check to make sure that all promises that have been made are
included in the final deal. Written contracts will not only
spell out what the merchant is supposed to do and the price, but
also let you know what is required of you.
contracts vary significantly but there are common elements in all of
them. Here are the most important ones:
Address, Phone Numbers and License & Registration Numbers, if
any: This may seem like a
no-brainer, but the address should not be a post office box, but a
street address. You cannot serve legal papers to a post office
box. If your contractor won't give you a physical address, go
and Completion Dates:
Establish both in writing. These are very important, as a slow start
or drawn out completion can be very aggravating or cost you money or
other problems. It is not unusual, however, for the contract to have
some language about delays due to "weather, acts of God and
material delays" or statements regarding delays caused by other
(including you) that are beyond their control.
Guarantee: Contractors will
usually give some kind of guarantee on their work. This clause
should state what is guaranteed and when it expires.
Description of Materials and Products:
Brands, models, colors, etc. should be detailed. The rule of thumb
is that the descriptions of the products and materials should be
detailed enough to order from.
other words, a description of "Kenmore dishwasher" would
not be enough. You need to know which Kenmore dishwasher is to
be installed. Stating that the transmission is to be replaced
is not adequate. Is it new, rebuilt, or from salvage?
Original equipment manufacture (OEM) or replacement.
When applicable, the technique as to how materials will be applied
should be detailed. For example, a painting contract should state
whether the paint will be sprayed or applied with a brush and
on Product Warranties: It
should be spelled out who is responsible for servicing products
under warranty. Copies of product warranties should be attached as
part of the contract.
there is a warranty on parts, does it include replacement labor as
well? A warranty on a $15 gallon of paint doesn't account for
much if you have to pay a contractor $250 in fees to apply the
Information: This is
crucial and should include the following: the price, or how the
final billing amount will be calculated; the payment schedule; and
Order Stipulation: It
should be included in the contract that changes from the original
contract will be put in writing, with all costs clearly stated.
and Fees: If your job
requires permits, the contract should state that all necessary
permits have been obtained and copies should be attached to the
Copies of the contractor’s insurance coverage should be attached
to the contract.
of Disagreement: The
contract should also specify how you and your contractor would
settle any major disagreements, be it mediation, arbitration or
should be dated and signed by both the homeowner and the contractor.
If any changes to the contract occur, both parties should initial