Seven Ways to Protect Yourself With A Construction Contract

Under California law, construction contracts for residential work, including those for electrical projects or repairs, fall into two categories: Service & Repair (for projects up to $750) and Home Improvement (for projects over $750). Each type of contract must contain the language required in the Business & Professions Code and the Civil Code. Protect yourself by demanding the following from your electrical contractor:

• Get a copy of the written contract, signed by both you and the contractor, before any work begins.

• Make sure the contract is dated; includes the contractor's full name, license number and address; and specifies the exact nature of the work to be performed, materials to be provided, time frame for completion, price and payment schedule.

• Make sure the contract contains information about the contractor’s workers’ compensation and commercial general liability insurance coverage.

• Only give the contractor a maximum down payment of $1,000 or 10%, whichever is less, on a Home Improvement Contract. Do not pay ANY down payment for a Service & Repair Contract.

• Make sure your Home Improvement Contract includes the following: Notice to Owner (mechanic's lien warning), Notice of Right to Cancel, and two copies of a Notice of Cancellation for you to use if you decide to cancel the contract. Learn more about California Mechanic’s Liens and Home Improvement Contract Requirements.

• Make sure that your Service & Repair Contract includes the disclosures and consumer information required under Business & Professions Code § 7159.10.

• Make sure that your Home Improvement Contract includes the disclosures and consumer information required under Business & Professions Code § 7159.